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. Assume the inflation rate over the 40-year time period averaged a constant 3.9% per year.

1) What is the CV purchasing power of his $1 million at age 65? (Hint: Use the day he started 40 years ago as the base year.)

2) How many future dollars should he have accumulated over the 40 years to have a CV purchasing power equal to $2 million at his current age of 65?

a) The CV purchasing power is $ (?)

b) To have a CV purchasing power of $2 million, he should have accumulated $ (?) future dollars