Shelly Franks is planning for her retirement, so she is setting up a payout annuity with her bank. She is now 35 years old, and she will retire when she is 65. She wants to receive annual payouts for twenty years, and she wants those payouts to receive an annual COLA of 4%.

(a) She wants her first payout to have the same purchasing power as does $19,000 today. How big should that payout be if she assumes inflation of 4% per year?

(b) How much money must she deposit when she is 65 if her money earns 8.3% interest per year?

(c) How large a monthly payment must she make if she saves for her payout annuity with an ordinary annuity? (The two annuities pay the same interest rate.)

(d) How large a monthly payment would she make if she waits until she is 40 before starting her ordinary annuity?