The Finance Department saves $5,000 per month for the next 10 years as a safety net for economic downturns. The money will be deposited in a high-yield savings account that pays 7.5 percent interest compounding monthly. The first deposit will be made today. What would today's deposit amount need to be if the department opted for a lump sum deposit today that would produce the same amount of savings as the monthly deposits after 10 years?

Answer rating: 100% (QA)

To find out the lump sum deposit amount required today we can use the future value formula for a lum... View the full answer