Problem #1. Jason's uncle loaned him $36,550 to help start a landscaping business. They agreed that Jason would pay off the entire loan plus 3.49% annually compounded interest in 3 years, and that in the meantime he would make monthly deposits into a bank account to make sure that he has the amount needed when the loan comes due. The bank will pay 2.6%.

(a) Find the total amount Jason will need to repay the loan. Show your work.

(b) How much should each of his monthly deposits be? Show your work.

You must show detailed calculations using formulas (not tables) from Chapters 11 and 12 to receive credit for your answers.

Problem #2. Take a look at example 6 from section 12-6 named "Calculating Present Value of an Annuity by Formula". Solve the following problem using formulas only. Show your work.

(a) What is the present of an ordinary annuity of $250 per month for 5 years at 5% interest compounded monthly?

(b) What is the present value of this investment if it is an annuity due?