Year Cash Inflow 1 1,500 2 7,000 3 0 4 0 5 0 6 0 7 0 8 28,000

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Future value. Jack and Jill are saving for a rainy day and decide to put $50 away in their local bank every year for the next 25 years. The local Up-the-Hill Bank will pay them 5% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $700. Is there enough in the rainy-day fund to cover it? a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? (Round to the nearest cent.) Present value. A smooth-talking used-car salesman who smiles considerably is offering you a great deal on a "pre-owned" car. He says, "For only 6 annual payments of $2,600, this beautiful 1998 Honda Civic can be yours." If you can borrow money at 7%, what is the price of this car? Assume the payment is made at the end of each year. If you can borrow money at 7%, what is the price of this car? (Round to the nearest cent.)