1. Jor Amster is a young professional planning his future. He knows he needs to start saving (or investing) soon. But he also knows he doesnt have a lot of income right now. He expects his income and so his ability to save to rise over time.

So he makes this plan:

• save $300/month for 2 years @2%
• then save $400/month for 3 years @3%
• then invest $1,000/month for 10 years @8%

Assume everything stays in one account, with rates of return rising for all his funds as given above. Also assume monthly compounding.

This is a compound problem:

• Find the FV at the end of 24 months of that first ordinary annuity problem.
• • This FV then becomes a PV for the second annuity problem.