4. Your father has decided to save $400 each month in a trust account to help fund his early retirement. Payments will be made at the beginning of each month for 25 years. Following that 25-year period, your father will withdraw 20 equal annual payments, with the first payment to be made at the end of year 26. The funds will be invested at a nominal (APR) rate of 4.5 percent, with monthly compounding, during both the accumulation and the distribution periods.

a. How large will each of your fathers 20 retirement period payments be? Use a timeline.

b. If your father can also invest a lump sum today of $35,000 from money he just inherited to supplement his own payments (same investment fund in Part (a) above), how much will his total annual payment be during each of his retirement years?

Use a financial calculator