The baby-boomer generation is the largest generation group in Canadian history (about eight million). Experts say that the baby-boomer generation cannot count on company pension or Social Security to provide as a comfortable retirement as their parents had. It is recommended that they start to save early and regularly. A baby-boomer, decided to deposit $500 at the end of each month in a sinking fund that paid interest of 8.2% compounded monthly for retirement in 15 years. These savings will provide him with additional funds for his retirement in addition to his pension plan and social security incomes.

(a) How much will be in the account when he retires?

(b) Georgie believed that he needed to accumulate $250,000 in the 15-year period to have a comfortable retirement. To meet the goal with all the same conditions of investment, interest rate, term and compounding, he must increase his monthly payment. What should his new monthly payment be?