Assume that one year from now, you will deposit $1,000 into a savings account that pays 8 percent.

a. If the bank compounds interest annually, how much will you have in your account four years from now?

b. What would your balance four years from now be if the bank used quarterly compounding rather than annual compounding?

c. Suppose you deposited the $1,000 in 4 payments of $250 each at Year 1, Year 2, Year 3, and Year 4. How much would you have in your account at Year 4, based on 8 percent annual compounding?

d. Suppose you deposited 4 equal payments in your account at Year 1, Year 2, Year 3, and Year 4.

Assuming an 8 percent interest rate, how large would each of your payments have to be for you to obtain the same ending balance as you calculated in part a?