Problem 3:

Future value of annuity. (Tables needed.)

Linda Ogleby wants to accumulate $40,000 to use for an around the world trip. She plans to

accumulate the desired amount by depositing $5,500 annual-year-end payments into an account

at the National Bank which pays 4% interest, compounded annually.

1. Compute the account balance at the end of the sixth year.

2. Compute the amount of each payment that Linda must make at the end of each of the six

years to accumulate the $40,000.