c) Mr. Angela has just been employed by XYZ LTD, a company which allows its employees to have a private arrangement for their retirement pension. Mr. Jangala is 30 years old and is considering contributing to a private pension 4 fund, which will guarantee him monthly payments equal to of his current income, which is fixed at TZS 4,000,000 per month.

Required: i. If the expected real interest rate is 6% per year, how much should be accumulated in the pension fund to meet the expectations of Mr. Jangala if he lived for 12 years after retirement? [5 Marks]

ii. If Mr. Jangala is to retire at the age of 60 years, how much should be contributed monthly to achieve the desired retirement benefit?