Wharton Company is planning to make the following investments.

1. $1,000 at the end of each year for five years at a 10 percent annual rate. Wharton Company will leave the accumulated principal and earnings in the bank for another five years at a 12 percent annual rate.

2. $3,000 at the end of each year for seven years at a 15 percent annual rate. Wharton will not make the first $3,000 payment until four years from now.

REQUIRED:

a. How much money will Wharton have at the end of ten years?

b. How much would Wharton have to invest in a lump sum today to have an equivalent amount at the end of ten years, given a 12 percent annual rate of return?