**Scenario for Savings and Compound Interest Analysis****a. Saving for a House**- A friend, Grace, wants to purchase a house in five years. To save for the house, Grace decides to deposit $138,000 in a savings account on January 1 of this year. - The savings account will earn 7 percent annually. Any interest earned will be added to the fund at year-end (rather than withdrawn).**b. Annual Deposits**- Another friend, Claire, plans to deposit $10,300 at the end of each year in a savings account.- The account will earn 10 percent annual interest, which will be added to the fund balance at year-end. Claire will make her first deposit at the end of this year.**Relevant Financial Factors**- FV of $1 (Future Value of $1)- PV of $1 (Present Value of $1)- FVA of $1 (Future Value Annuity of $1)- PVA of $1 (Present Value Annuity of $1)*Note: Use appropriate factor(s) from the tables provided.***Questions to Answer:**1. **Scenario A:** - How much will be available at the end of five years? - What is the total interest earned over the five years?2. **Scenario B:** - What will be the balance in the savings account at the end of the 8th year (i.e., after 8 deposits)? - What is the interest earned on the 8 deposits?**Graph/Diagram Explanation:**- There are no graphs or diagrams in the image.

According to the given question, we need to compute the figures asked in the questions, We can solve these questions using the formula. Future value of an annuity: The future value of an annuity refers to the value of a recurring payment at a particular date and computing interest at a particular rate of return or discounted rate. The formula for computing the future value annuity is as follows: FVA = [(1 + i )n - 1]/i 1) We can compute the available balance at the end of the five years: (Grace deposited of $ 138000 on January 1, Year 1) Therefore, the available balance at the end of the five years = P * (1 + i)n = $ 138000 * (1 + 0.07)5 = ($ 138000 * 1.40255) = $ 193551.90 or $ 193552. Where, P = Principal = $ 138000, i = rate of interest = 7% or 0.07, n = Number of years = 5 years. Therefore, the available balance at the end of the five years is $ 193552. Therefore, the total interest earned = $ (193552 - 138000) = $ 55552. 2) Determination of the available balance at the end of the 8th year: = P * FVA (for 7 years at 10%) = $ 10300 * [(1 + 0.10) 7 - 1]/ 0.10 = $ 10300 * 9.487 = $ 97716.10 Therefore, the balance in the savings account will be $ 97716.10. Therefore, the interest earned in the 8th deposit = $ 10300 * (1.10)0 = ($ 10300 * 0) = $ 0.