1. Find the balance after 5 years in a savings account that pays2.5% APR compounded monthly if deposits are made to the accounteach month in the amount of $100.

2. A friend has an IRA with an APR of 6.25%. She stared the IRAat age 25 and deposits $50 per month.
          a) How muchwill her IRA contain when she retires at age 65?
          b) How muchmoney did she contribute to the account?
          c) Use theanswers from parts a) and b) to determine the amount of interestearned.

3. What if your friend from question #2 doubled her deposit andsaved $100 per month? Do you think her money would double? Let'sfind out! Redo question #4, all the parts, with a monthly depositof $100 per month. Were you surprised by the results?

4. At age 35 you start saving for retirement. Your investmentplan pays 6% APR compounded monthly and you want to have $2,000,000when you retire at age 65.
        a) How much do you needto save each month?
        b) Suppose you hadstarted saving when you were 30 years old. How much would you needto save each month?
        c) Suppose you hadstarted saving when you were 25 years old. How much would you needto save each month?
        d) Were you surprised bythe answers in parts a - c? Discuss the effect of time on thegrowth of money.