You are earning an average salary of $46,500 annually and will retire in 20 years.

a. If you put 20% of your gross average income in an ordinary annuity compounded at 7% annually, what will be the value of the annuity when you retire?

b. Suppose you want to have $500,000 when you retire. How much should you put aside annually as a percentage of your gross income for 20 years at 7% compounded annually?