Sarah wants to deposit $12,000 at the end of each year for 9 years into an annuity.
(a) Sarah’s local bank offers an account paying 5% interest compounded annually. Find the final amount she will have on deposit.
(b) Sarah’s brother-in-law works in a bank that pays 3% compounded annually. If she deposits her money in this bank instead, how much money will she have in her account?
(c) How much would Sarah lose over 9 years by using her brother-in-law’s bank instead of her local bank?