1. a. Pedro wants to buy a house in three years. He estimates that he'll need $35,000 for the down payment and closing costs (transfer tax, fees, etc).
2. a. If his bank guarantees a savings account rate of 2% annually for the next three years, how much money does Pedro need to deposit into his savings account today to be sure that he'll have the down payment of $35,000 at the end of Year 3?
3. b. How much does Pedro need to deposit if the bank guarantees an interest rate of 5%?