Estelle deposits a single lump sum into an account that earns 3% per annum compound interest.
Present value interest factors for an annuity of $1 for various interest rates \((r)\) and numbers of periods \((N)\) are shown in the table.
From this account, Estelle plans to make the following withdrawals.
- $2000 at the end of each year for the first 15 years (the first withdrawal is one year after the deposit).
- $5000 at the end of each year for a further 10 years, that is, in years 16 to 25.
Find the smallest lump sum Estelle must deposit so that both sets of withdrawals can be made. (3 marks)
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