1. A couple needs $7,500.00 next year to pay tuition for their daughter’s first year of pre-school. If they can earn 6.00% over the next year, how much should they set aside today to cover the tuition payment?
2. A devoted Indiana basketball fan needs $14,000.00 to attend the Final Four exactly one year from today. If the fan can earn 7.00% annually on his investments, how much should he set aside today?
3. A loan shark offers to give you $5,099.00 today, but, in exchange, he wants you to pay him $6,797.00 in one year. What is the rate of interest being charged on the account?