1-You invest $3,000 in a certificate of deposit that matures after ten years and pays 5 percent interest, which is compounded annually until the certificate matures.

1. How much interest will you earn if the interest is left to accumulate?
2. How much interest will you earn if the interest is withdrawn each year? 1,500

2- Inflation is a general increase in prices and may be measured by the Consumer Price Index (CPI). The following is a problem related to price increases. Nancy and Pam both currently earn $100,000. If the annual rate of inflation is 4 percent, how much must each earn after ten years to maintain their purchasing power?

3- Tuition costs at various colleges vary from $15,000 to $35,000 annually. These tuitions are expected to increase over time. If the annual rate of increase is 3 percent, what will be the new range in tuition costs in ten years? If the rate doubles from 3 to 6 percent, what will be the range in tuition costs after ten years?