NAME_________________________________________

Note: The effort you expend in clearly explaining your work solidifies
your learning. In particular, research has shown that writing and speaking
trigger different areas of your brain. By writing something down - even when
you think you already understand it - your learning is reinforced
by involving other areas of your brain.
In addition, **it will be a much more useful study guide when you review for
a quiz or exam.**

SHOW WORK means that you should show the computation (ie 1+1=2)
that resulted in the answer to the problem.

Jane and Joan were twins. They both went to work at age
22 with
identical jobs, and at the end of each year they received identical
bonuses of
$2,000.00. But there was one difference:

**Question 2**
Set up a formula with numbers substituted in for the variables
to determine how much money Jane will
have at the end of age 65?

**Question 3** Solve for an answer. Write down the CALC KEYS
you used to show
that the answer is $317253.34.

**Question 5**
Set up a formula with numbers substituted in for the variables
to determine how much money she will have
at the end of age 31? Explain why the formula that you chose was
appropriate to use in this case.

**Question 6** Solve for an answer. Write down the CALC KEYS
you used to show that the answer is $28973.12.

**Question 7**
Use the answer in Question 6 in order to
set up a formula with numbers substituted in for the variables
to determine how much money she will have
at the end of age 65?
Explain why the formula that you chose
was appropriate to use in this case.

**Question 8** Solve for an answer. Write down the CALC KEYS
you used to show that the answer is $396645.88.

**Question 9** The first time I did this problem, I got
$396645.95 as an answer. What did I do wrong? (I'm looking for
a general answer instead of a specific one, but if you can figure out
the specific calculation that yields this answer, write that down too)

So Jane puts in $68,000 total and ends up with
$317,253.34
while Joan puts in $20,000 total
and ends up with $396,645.88.
**Notice that at a rate of 8%,
Joan ends up ahead by saving earlier, even though she puts
in a lot less money.** Yet, if the interest rate
had been different, it is not clear who would earn more money.
**Extra Credit** What interest rate yields equal amounts of
money for Joan and Jane at the end of their 65th year? Explain how you
got your answer.