FUTURE VALUE It is now January 1, 2014. Today you will deposit $1,000 into a savings account that pays 8%.
a. If the bank compounds interest annually, how much will you have in your account on January 1, 2017?
b. What will your January 1, 2017, balance be if the bank uses quarterly compounding?
c. Suppose you deposit $1,000 in three payments of $333 333 each on January 1 of 2015, 2016, and 2017. How much will you have in your account on January 1, 2017, based on 8% annual compounding?
d. How much will be in your account if the three payments begin on January 1, 2014?
e. Suppose you deposit three equal payments into your account on January 1 of 2015, 2016, and 2017. Assuming an 8% interest rate, how large must your payments be to have the same ending balance as in Part a?