1: You want to buy a vehicle and know you can afford $400 a month for 5 years. The interest rate is 6 percent, compounded monthly. How much money can you afford to borrow?

2: Over the past 30 years your parents saved money each month for their retirement. They retired this week and expect to live another 28 years. Their investment account is currently valued at $487,300 and is expected to earn 7 percent annually in the future. How much money can they withdraw annually if they wish to spend all of their money during their lifetime? Assume they want to make their first withdrawal starting today.