J&L Corporation currently grows and sells fresh produce year-round in its homemade greenhouses. As the business is growing, J&L hopes to significantly expand its number of greenhouses in 5 years. J&L has deposited $100,000 into an investment account that will earn a 6% annual rate of interest. J&L is also committed to depositing $10,000 into the same account at the end of each of the next 5 years.

Instructions

a. Using the FV function in Excel or a financial calculator, calculate how much J&L will have in its account at the end of 5 years.

b. Assume now that J&L will make the $10,000 deposits at the beginning of the next 5 years. Using the FV function in Excel, or a financial calculator, calculate how much J&L will have in its account at the end of year 5.

c. J&L knows it needs $500,000 in 5 years to purchase additional greenhouses. Assuming it will make annual deposits of $10,000 into an account earning 6% annual interest at the end of the next 5 years, use the PV function in Excel or a financial calculator to determine how much it must deposit today.