You have just made a $1,500 contribution to your individual retirement account. Assume you earn a 12 percent rate of return and make no additional contributions. How much more will your account be worth when you retire in 25 years than it would be if you waited another 10 years before making this contribution?

5. Suppose Jim wants to be able to withdraw $10,000 at the end of five years and withdraw $12,000 at the end of six years, leaving a zero balance in the account after the last withdrawal. If Jim can earn 5% on his balances, how much does he need to deposit today to satisfy his withdrawals needs?