Aside equal amount of funds each year

Reference no: EM133629924

Question

A government needs to make a payment of $25,000,000 five years from now and they can earn 5%. Answer the two questions below, and explain which route is best.

- To fund with a lump sum, how much would they need to set aside today?

- Alternatively, suppose they wanted to set aside an equal amount of funds each year. How much would that need to be?

Reference no: EM133629924

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