Please answer and show all steps and formulas

QUESTION 2:

Mr. MoneyMiser is planning to retire in 30 years. His current net worth is -$100,000 (it is a loan

at an interest rate of 6% per annum) His goal is to have $2,000,000 at retirement.

a. Determine the constant amount he should be saving each year for 30 years, so that his loan is

paid off and he will have $2,000,000 for his retirement. He will earn 6% per year rate of

return on his savings.

b. MoneyMiser will save the same annual amount as calculated in part a above, but suppose he

can earn 8% per annum on his savings. Loan and all the accumulated interest at the rate of

6% will be paid off 5 years from today. After paying off the loan how much MoneyMiser

should be saving each year to have $2,000,000 at his retirement. Any difference between his

savings in part a above, and required savings per year in part b to achieve his goal of $2,000,

000 at retirement will be invested in a risky portfolio expected to earn 10% per year. What

will be the value of the risky portfolio when he retires