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1. (20 points) Annual bonus. Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest compounded annually. The size of
1. (20 points) Annual bonus. Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus amount she will deposit at the end of year 1 is $2500. a) Determine how much will be in the account immediately after the 6 th deposit. b) What's the future value if she plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8)? c) What's the future value if she plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8), but plans to skip the deposits at the end of years 3 and 6 ? For this question, draw a cash flow diagram for each part a), b), and c). For this question, the cash flow diagrams constitute part of the question. You will lose points if they are omitted. For the computations, you can use either the formulas or the tabulated values
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