Questions: (a) You would like to have 120,000 in 10 years. To accumulate this amount you plan to deposit at the beginning of each year an equal sum in the bank, which will earn 7% interest rate compounded annually. Your first payment will be made now - at the beginning of the year. How much must you deposit annually to accumulate this amount? Using financial calculator
(b) If you decide to make a large lump-sum deposit at the beginning of next year instead of annual deposits how large should this lump-sum deposit be? Assume 7% interest rate on the deposit. (there are no other deposits other than the lump-sum a year from now). Using financial calculator.