Jack and Jill are saving for a rainy day and decide to put $50 away in their local bank every year for the next twenty-five years. The local Up-the-Hill Bank will pay them 7% on their account.
a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of twenty-five years?
b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $700. Is there enough in the rainy day fund to cover it?