Problems:

1. Future value If you deposit $1,000 in a bank account that pays 5% interest annually, how much would be in your account after 5 years? (20 points)

2. Paying off credit cards Simon recently received a credit card with an 18 percent nominal interest rate. With the card, he purchased a new stereo for $500.00. The minimum payment on the card is only $10 per month. (30 points)

1. If he makes the minimum monthly payment and makes no other charges, how long will it be before he pays off the card? Round to the nearest month and year.
2. If he makes monthly payments of $50, how long will it take him to pay off the debt? Round to the nearest month and year.
3. How much more in total payments will he make under the $10-a-month plan than under the $50-a-month plan?