• Paula Morduch is considering purchasing a new van for Meals for the Homeless (Meals). She expects to buy the van for $50,000 4 years from today. Solve the following using a calculator or spreadsheet.

a.If she can invest money at 5 percent compoundedquarterly, how much must she invest today?

b.Suppose that Morduch believes that Meals can put aside only $37,500 today to buy the new van in 3 years. However, she thinks that she can invest the money at 7.20 percent compounded monthly. Determine if she will have the $50,000 she will need for the new van.

c.Assuming that Morduch can put aside $37,000 today and needs to have $50,000 available in 4 years, what interest rate must be earned? Use quarterly compounding.

d.Assume that Morduch believes that she can earn only 6 percent per year on the money that Meals invests. Assuming monthly compounding, how much must be put aside today to provide $50,000 in 4 years?