$24.$ Problem $4-24$

Required Lump Sum Payment

To complete your last year in business school and then go through law school, you will need $$10,000$ per year for $4$ years, starting next year $($i$.$e$.,$ you will need to withdraw the first $$10,000$ one year from today$).$ Your uncle offers to put you through school, and he will deposit in a bank paying $7\%$ interest a sum of money that is sufficient to provide the four payments of $$10,000$ each. His deposit will be made today.

a$.$ How large must the deposit be$?$b$.$ How much will be in the account immediately after you make the first withdrawal? After the last withdrawal?

a$.$ PV $=$ $

b$.$ Amount remaining after first withdrawal $=$ $

Amount remaining after last withdrawal $=$ $