You are planning to retire in 35 years. You decide that on the first day of each month for the next 35 years beginning immediately you will make a contribution into a retirement account. The retirement account pays an interest rate of 5% per year compounded semi-annually. Once retired your retirement dreams are to be able to withdraw $6,000 per month for the next 40 years beginning immediately upon retirement. Ten years after retirement you also want to celebrate the milestone by taking a luxurious trip at the start of the year, costing $20,000.

a. What r value should be used in your calculations?

b. What is the amount of money you will need to afford your monthly withdrawal during retirement?

c. How much money in total will you need to have saved when you retire?

d. How much must you save each month to make this retirement dream possible?