Question: To save for $2,000 in five years to purchase a new gaming computer, one must save different amounts, depending on the frequency of the payments.

To save for $2,000 in five years to purchase a new gaming computer, one must save different amounts, depending on the frequency of the payments. Assuming one was contributing to a Tax-Free Savings Account (TFSA) that is paying a 2.5 percent rate of return, what would be required payments based on the following scenarios.

One deposit (lump sum) paid at the beginning of the five-year period, which compounded annually at 2.5 percent? (1 mark)

Monthly Payments, with 2.5 percent that is compounded monthly? (payments are made at the BEGINNING of the Payment Period)

Biweekly Payments (26 payments per year), with 2.5 percent that is compounded biweekly? (payments are made at the BEGINNING of the Payment Period)

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