Dell is considering a plan to save $2,500 a month for the next five years to build a safety net for recessionary periods. The money will be set aside in a savings account that pays 4.24 percent annual rate, with interest compounded monthly. Dell plans to deposit the first $2,500 today.
How much would the safety net accumulate in five years?
If the company wants to deposit an equivalent lump sum today, how much would it have to deposit?