You are planning to buy a nice gift for your close friend 2 years later when she turns 20 years old. The gift will cost $700 by then.

a) If your saving account pays 6.5% interest rate per annum and you decide to deposit a single lump sum amount today, how much do you need to put down so you are able to accumulate $700 two years later?

b) If you are able to make 3 annual deposits of $100, $200, and $300 starting from today, and your saving account still pays 6.5% interest rate per annum, would you be able to have enough money to buy that gift?