1. You would like to have $70 000 in 10 years. To accumulate this amount, you plan to deposit an equal sum into a bank account at the end of each year that will earn 6% p.a interest compounded annually. Your first payment will be made at the end of this year.

a. How much must you deposit annually to accumulate this amount?

b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should the lump-sum deposit be? (Assume that you can earn 6% interest annually on this deposit.)

c. At the end of five years, you will receive $20 000 and deposit it into the account in an effort to reach your goal of $70 000 at the end of 10 years. In addition to the deposit, how much must you deposit in equal annual amounts to reach your goal? (Again, assume that you can earn 6% annual interest on this deposit.)

d. How doestheanswerinquestion (a)differifthebankpaysyou 6%interest compounded semi-annually and you would like to make a deposit each 6 months?