It is now January 1, 2006, and you will need $1,000 on January 1, 2010. Your bank compounds interest at an 8 percent annual rate.

1. How much must you deposit today to have a balance of $1,000 on January 1, 2010?
2. If you want to make 4 equal payments on each January 1 from 2007 through 2010 to accumulate the $1,000, how large must each payment be?
3. If your father were to offer either to make the payments calculated in part (b) or to give you $750 on January 1, 2007, which would you choose? Explain.