Assume that it is now January 1, 2002. On January 1, 2003, 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 on January 1, 2006?

(b) What would your January 1, 2006, balance be if the bank used

quarterly compounding rather than annual compounding?

(c) Suppose you deposited the $1,000 in 4 payments of $250 each

on January 1 of 2003, 2004, 2005, and 2006. How much would

you have in your account on January 1, 2006, based on 8

percent annual compounding?

(d) Suppose you deposited 4 equal payments in your account on

January 1 of 2003, 2004, 2005, and 2006. 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?