Problem:
To complete your last year in business school and then go through law school, you will need $35,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $35,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 7.77% interest a sum of money that is sufficient to provide the 4 payments of $35,000 each. His deposit will be made today.
Question 1: How large must the deposit be? Please provide step by step solution and show all work.
Question 2: How much will be in the account immediately after you make the first withdrawal? Please provide step by step solution and show all work.
Question 3: How much will be in the account immediately after you make the last withdrawal? Please provide step by step solution and show all work.