CASE STUDY: Brian is a 22-year old university graduate having just secured a government job earning $50,000/year. He does not percieve there to be much risk to him keeping the job long into the future. In trying to make some decisions around his financial future he deliberates the following:

1) a) Government jobs usually come with a pension plan. If Brian contributes $750 to the pension plan, through his paycheck on a monthly basis, and this is matched by the government, what is the future value of Brian's pension at retirement? Assume the investment rate is 6%. and that Brian's income does not grow over time.

b) How does the answer in a) affect Brian's accounting balance sheet today? In 10 years? What are those values?

c) Assuming Brian retires at age 65, how much of an income would he be able to derive starting at month 1 of retirement from the value calculated in part a), if he were to draw an income from the pension at the beginning of each month, and earn 6% AIR on the assets, with a 2% inflation rate? Assume that his life expectancy is age 95, and that he will leave no pension value to his estate at death. (Show rationale and calculations)