1.Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $400.However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $4,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 11.5%per year, what should your friend do?

2.You are saving for retirement. To live comfortably, you decide you will need to save $3,000,000 by the time you are 65.Today is your 22nd birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 5%, how much must you set aside each year to make sure that you will have $3,000,000 in the account on your 65th birthday?