1. You want to buy a new sports car 3 years from now, and you plan to save $2,700 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3rd deposit, 3 years from now?
2. Assume that you are now 25 years old. You would like to retire at age 65. You would like to have an annual income of $125,000 beginning at age 65, and that income should be distributed to you until your 85th birthday. You would like to have $1 million left over to give to your heirs on your 85th birthday. You expect to earn 8% per year. Determine the amount of money you must set aside at the end of each year until you reach 65 to reach your retirement goal. Why does this problem have to be split into the beginning and ending payment periods?