1. 1. Your daughter will be entering college in 12 years. The current cost of a college education is $100,000, and the current estimate for annual college cost inflation is 3%. How much money must you deposit today, in an investment with an annual return of 8%, compounded weekly, in order to completely finance your daughter's college education?

1. 2. You have your eye on a piece of property, but it is not currently for sale. You have been told that the owner will be interested in selling four years from now, when such a sale will be advantageous for tax reasons. A current appraisal values this land at $125,000, and the property inflation rate is 3.5%. How much must you deposit today, in an investment fund that returns 7%, compounded daily, in order to finance this future purchase?

3.  You are considering a retirement strategy of saving $400 per month until you retire 40 years from now. If you can earn 5%, compounded monthly, on your savings, how much will you have at retirement? If you plan a retirement of 20 years, how much monthly income will your retirement savings generate, assuming that it will be completely depleted at the end of 20 years?

4. Your insurance broker is offering to sell you an annuity that will pay you $20,000 per year for the next twelve years. You have investment alternatives on which you can earn 10%. If the price of the annuity is $150,000, should you buy it?

5. Valley Bank offers a savings account with an interest rate of 7%, compounded daily, while Mountain Bank offers a similar account with an interest rate of 7.125%, compounded monthly. Which should you choose, based on the effective annual return for each account?