Answer
The amount by which lump sum deposit is more than periodic deposits = 30,000
Work Step by Step
Total amount after 20 year in lump sum deposit at 5% compounded interest rate
= 30000$(1+\frac{5}{100})^{20}$
= 30000 $\times$ 2.65329 = 79598.9
Total amount after 20 year in periodic deposit at 5% compound rate
= 1500 $\times \frac{[1-(1.05)^{20}]}{(1 - 1.05)}$
= 1500 $\times$ 33
= 49598.9
The amount by which lump sum deposit is more than periodic deposits = 79598.9 - 49598.9 = 30,000
