Describe Example 2 and comment on its possible relevance.

Example 2

Suppose you are 21 years old and will make monthly deposits to a bank account paying 4% annual interest compounded monthly. Option 1: Pay yourself $200 per month for 5 years and then leave the balance in the bank until age 65. (Total amount of deposits is $200 5 x 12 = $12,000.)

Option II: Wait until you are 50 years old (the age most of us start thinking seriously about retirement) and then deposit $200 per month until age 65. (Total amount of deposits is $200 x 15 x 12 = $36,000.)