1.You are celebrating your 25^th birthday today and want to start saving for your anticipated retirement at the age of 65. You want to be able to withdraw $3,000 from your saving account each month for 20 years following your retirement; the first withdrawal will be at the end of the month on your 65^th birthday. You intend to invest your money in the local saving bank, which offer 6 per cent interest per year compounded monthly. You want to make equal, monthly payment in a new savings account you will establish for your retirement fund.

a.If you start making these deposits on your 25^th birthday and continuous to make deposit until you are 65, what amount must you deposit monthly to be able to make the desired withdrawals on retirement?

b.Suppose you just inherited a large sum of money. Rather than making monthly equal payments you decide to make one Lump-sum payment on your 25^th birthday to cover your retirement needs, what amount would you have to deposit?