Question: Problem 5-54 (similar to) (Complex present value) You would like to have $31,000 in 10 years. To accumulate this amount you plan to deposit each

Problem 5-54 (similar to) (Complex present value) You would like to have $31,000 in 10 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 6 percent interest compounded annually. Your first payment will be made at the end of the year.

a. How much must you deposit annually to accumulate $31,000 in 10 years?

b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 6 percent on this deposit.)

c. At the end of 4 years you will receive $12,000 and deposit this in the bank toward your goal of $31,000 at the end of 10 years. In addition to this deposit, how much must you deposit in equal annual deposits to reach your goal? (Again assume you can earn 6 percent on this deposit.)

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