Laura has decided to set up an IRA (Individual Retirement Account) in which she will make a deposit to her plan at the end of each year, beginning one year from today. She expects to earn 9% on her investment, over a period of 10 years.

Required

A. If she invests the maximum amount of $3,000 at the end of each of the 10 years, how much will she have accumulated after 10 years? How much of this will be interest?

B. Assume the same facts as stated previously, except that Laura plans to make her deposit for each of the 10 years beginning today. How much will she have accumulated 10 years from today? How much of the ending account balance will be composed of interest?

C. Refer to the answers for parts A and B. Which one is larger? Why? Explain.