1. **State the problem:** Ann and Tom want to find the lump sum amount to deposit now at a 7% annual interest rate, compounded annually, so that the fund grows to 50000 in 10 years. 2. **Formula used:** The future value of a lump sum with compound interest is given by: $$ A = P(1 + r)^n $$ where: - $A$ is the amount after $n$ years, - $P$ is the principal (initial deposit), - $r$ is the annual interest rate (as a decimal), - $n$ is the number of years. 3. **Given values:** - $A = 50000$ - $r = 0.07$ - $n = 10$ 4. **Find $P$:** Rearranging the formula to solve for $P$: $$ P = \frac{A}{(1 + r)^n} $$ 5. **Calculate:** $$ P = \frac{50000}{(1 + 0.07)^{10}} = \frac{50000}{(1.07)^{10}} $$ 6. **Evaluate $(1.07)^{10}$:** $$ (1.07)^{10} \approx 1.967151 $$ 7. **Final calculation:** $$ P = \frac{50000}{1.967151} \approx 25418.58 $$ **Answer:** Ann and Tom must deposit approximately **25418.58** as a lump sum now to have 50000 in 10 years at 7% annual interest compounded annually.