1. Suppose you have $500 to invest and you believe that you can earn 8% per year over the next 15 years. a/ How much would you have at the end of 15 years using compound interest? b/ How much would you have using simple interest?
2. Suppose you have a 1-year old son and you want to provide $75,000 in 17 years towards his college education. You currently have $5,000 to invest. What interest rate must you earn to have the $75,000 when you need it?