An engineer who is now 65 years old began planning for retirement 40 years ago. At that time, he thought that if he had $1 million when he retired, he would have more than enough money to live his remaining life in luxury. Use an average inflation rate of 4% per year over the 40-year time period.

(a) What is the constant-value dollar amount of his

$1 million now at age 65? Use the day he started 40 years ago as the base year.

(b) How many thencurrent

(future) dollars should he have accumulated over the 40 years to have a constant-value purchasing power equal to $1 million at retirement age?