1.Ruth H. wants to build a house in 12 years. She estimates that the total cost will be $350,000. If she can put aside $20,000 at the end of each year, what rate of return must she earn in order to have the amount needed, assuming annual compounding?

2.You have been offered a choice of:

Offer One $6,000 now

Offer Two $1,100 at the end of each year for 8 years at 6%

Offer Three $14,000 at the end of 8 years at 6%

Which offer is best?

3. As a financial adviser, you are helping you clients planning for their daughters education. Their daughter wants to go to SAIT in 10 years. The cost of tuition and other expenses is expected to be $20,000 per year for a period of 4 years of the BBA program payable at the beginning of each year. The rate of return on their savings until their daughter goes to SAIT is 6%. How much they need to save each year (assuming they will deposit the money at the end of each year) for the next 10 years so that they can fully pay for their daughters education?