Use the Annual Payout Annuity with COLA Formula to find the deposit necessary to receive monthly payouts with an annual cost-of-living adjustment. To use the formula, all figures must be annual figures, including the payout and the annual rate. You can adapt the formula for monthly payouts by using the future value of a one-year ordinary annuity in place of the annual payout, where pymt is the monthly payout, and the annual yield of the given compound interest rate in place of the annual rate r. Mitch Martinez is about to retire, so he is setting up a payout annuity with his bank. He wishes to receive a monthly payout for the next thirty years, where the payout starts at $1,950 per month and receives an annual COLA of 4%. His money will earn 7.8% compounded monthly.

(a) The annual payout is the future value of a one-year ordinary annuity. Find this future value. (Round your answer to the nearest cent.)

(b) The annual rate r is the annual yield of 7.8% interest compounded monthly. Find this annual yield. (Round your answer to six decimal places.)

(c) Use the Annual Payout Annuity with COLA Formula to find how much money he must deposit. (Round your answer to the nearest cent.)

(d) Mitch could have saved for his payout annuity with an ordinary annuity. If he had started doing so twenty years ago, what would the required monthly payments have been? (The two annuities pay the same interest rate. Round your answer to the nearest cent.)