1. Jane Smith decides she is going to begin a savings program and begins to save $2,000 per year. She deposit the monies into an interest bearing account (8%) each January 1^st beginning in 1980 and continues to make a total of 12 deposits each Jan 1^st. At which time she no longer makes contributions but she continues to let here savings accumulate until 2010.

How much did she deposit into her saving program?

$40,990.59

How much is it worth on Jan 1^st 2010?

$151,665.93 on Jan1st.

2. John Smith (Janes brother) thinks this is a good idea but MUST have the new 1980 Mustang II now. He begins his savings program once he completed paying for his car 5 years later and saves the same amount annually at the same rate (8%) but in lieu of stopping after the 12 year he continue until he has caught up with his sister. When will he catch up and how much annual savings does he need to contribute?