1. You work at a job that is getting more important all the time. Your starting
salary is $2000 per month. Your boss offers you two plans for raises:
A: You receive a raise of $500 per month each month.
B: Your salary is multiplied by 1.5 every year.
a. Under plan A, what will your salary be after 10 years?
b. Under plan B, what will your salary be after 10 years?
c. Under plan A, how much money will you have earned after 10 years?
d. Under plan B, how much money will you have earned after 10 years?
2. Henry wants to work for 40 years and live 20 years in retirement. He can
invest his savings in an account that earns 4%, compounded monthly. How much
money does he need to put into the account every month for 40 years in order
to be able to withdraw $1000 per month for 20 years after he stops making
deposits? Note that he is earning interest on his balance while he is contributing to the account and after he has stopped.