(Calculating the future value of an ordinary annuity) (Related to Finance for Life: Sav- ing for Retirement on page 204) At 25, Manoj Patel decided to leave his public sector job and start a furniture business. The business has grown in two years, and Manoj is now planning for his retirement.

a. He wants to retire at 65 and has found a pension fund that returns 8 percent an- nually and is free from any tax incidence. How much will Manoj have accumulated at the time of his retirement if he starts investing 250,000 each year in this account starting immediately?

b. Now consider that Manoj wants to ensure that his business grows to its full potential and decides to reinvest all the profits for the next three years before he starts saving for his pension. If his annual saving amount remains the same, how much will he have accumulated in his pension fund at the time of his retirement?