20. A couple will retire in 50 years; they plan to spend about $34,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 7% on retirement savings.

a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year.

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

*What is the annual savings?

b. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $64,000 on their child's college education?

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

*What is the annual savings?

6. The following table shows the prices of a sample of Treasury bonds, all of which have coupon rates of zero. Each bond makes a single payment at maturity.

Years to Maturity	Price (% of face value)
1	98.652%
2	95.151
3	91.344
4	87.280

a. What is the 1-year interest rate?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

b. What is the 2-year interest rate?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

c. What is the 3-year interest rate?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

d. What is the 4-year interest rate?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.