List something that you'd like to buy today if you had the money. Dream big. How much does this item cost? Now, add in the sales tax to find the total you need to save in order to make your purchase.

Explore each one of the following ways to save, as you will be buying the items including tax:

• Simple Interest. If you received only 1 interest payment of 2%, how much money would you have to put into savings? Note: show your work and explain how you solved the problem. Be sure that you are coming up with the starting value so that after interest, you meet your goal.
• Compound Interest. If you received 2% compounded monthly for 3 years, how much money would you have to put into the savings at the beginning of the 3 years? Note: show your work and explain how you solved the problem. Be sure that you are coming up with the starting value so that after interest, you meet your goal.
• Annuity. If you received 2% compounded monthly for 3 years, how much money would you have to put into the account each month for the 3 years? (HINT: See Example 4 in section 8.5).
• Which one of the three savings plans requires you to have the most upfront money? Which one requires the least? Use your knowledge of interest to explain why. Note: show your work and explain how you solved the problem. Be sure that you are coming up with the starting value so that after interest, you meet your goal.