1. What is the difference between simple interest and compound interest? Please, be sure to include an example.

2. Suppose you borrow $2,000 at 5% and you are going to make annual payments of $734.42. How long before you pay off the loan? Please, include your calculations.

Our Minor Project requires you to create a savings and investing plan to reach a total savings of $1,000,000.

The objective is to accumulate $1,000,000 in savings, in 30 years from today.

1. What amount of money must be set aside each month, to reach our goal, assuming that the money is not invested and no interest is earned?
2. Assume that the money is placed in a checking account that pays a 2% interest rate. The interest is compounded annually. What amount must be deposited each month to reach our goal?
3. For our third scenario, assume that the money is invested in an index fund, with an annual return rate of 8%. Because the gains are reinvested, the investment is subject to annual compounding. How does this change our calculation?

Please, show your calculations and include your results in a table, for ease of comparison.

Based on the above calculations, how difficult is it to become a millionaire? Please, include a discussion of each of the 3 scenarios above.

While there is not a minimum page requirement for the assignment, your submission must include your calculations, the table with your results and a discussion of each scenario, in your own words.