Suppose you are planning for your retirement in 40 years time. You currently have $2,000 invested in a money market account and $2,000 in an equity fund. The money market account is estimated to earn an annual return of 5.5% whereas the equity fund is expected to earn an annual return of 12.5%. For the next 40 years, you plan to add $350 per month at the end of each month to the money market account and $350 per month to the equity fund. When you retire, you plan to withdraw an equal amount for each of the next 35 years at the end of each month and have nothing left at the end (of 35 years after retirement). Additionally, when you retire you will transfer all amount from these two funds into a saving account that earns 4.5% annual rate of interest per year. [Note: All interest rates (of returns) are to be compounded monthly.]

i) Assuming that the rates will remain as forecasted, how much will you have (sum of all funds) at the time you retire? Show all formula(s) and steps, clearly label the final answer. Briefly interpret your answer

ii) Assuming that the rates will remain as forecasted, how much can you withdraw each month when (and after) you retire? Show all formula(s) and steps, clearly label the final answer. Briefly interpret your answer.

iii) Does your answer in Part (ii) seem too large? Why or why not? Support your explanation using relevant figures and calculation (you can make some assumptions in your calculation).