1. John Adams opened a bank saving account with $8,000 10 years ago. Today, the account balance is $18,000. If the account paid interest compounded annually, how much interest on interest was earned?
1) $3,242
2) $4,635
3) $5,786
4) $5,971
5) $6,096
2. Mr. Smith just won a lottery with a grand prize of $500,000. However, the lottery manager stipulates that the winner will receive $300,000 immediately, and $20,000 at the end of each of the next 10 years. Assuming that he can earn 6% on his money, how much has he actually won?
1) $ 192,156
2) $ 212,225
3) $347,202
4) $400,000
5) $447,202