Question A1 Part I

(a) Your father is now aged 50 and plans to start saving for 15 years to accumulate $1,500,000 at the age of 65 as his retirement fund. Given the required return is 9 percent compounded monthly, what will be his monthly payments with the first payment occurring one month from now? (5 marks)

(b) Followed with the previous question in part (a), what will be his annual payments if your father makes an annual saving with the first payment starting from today? (6 marks)