You would like to have

$70,000

in

15

years. To accumulate this amount, you plan to deposit an equal sum in the bank each year that will earn

9

percent interest compounded annually. Your first payment will be made at the end of the year.

a.How much must you deposit annually to accumulate this amount?

b.If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should the lump-sum deposit be? (Assume you can earn

9

percent on this deposit.)

c.At the end of year 5, you will receive

$15,000

and deposit it in the bank in an effort to reach your goal of

$70,000

at the end of year

15.

In addition to the lump-sum deposit, how much must you invest in

15

equal annual deposits to reach your goal? (Again, assume you can earn

9

percent on this deposit.)