1. You have recently been hired as a consultant for a personal financial planning firm.One of your first projects is creating a retirement plan for a couple, Meghan and Zachary McClure.They have just celebrated their 35^th birthdays and after finishing saving for their children's education, they have decided to get serious about saving for their retirement.

Meghan and Zachary hope to retire 30 years from now (on their 65^th birthdays), and they expect to live until age 85.Their hope is to be able to withdraw $130,000 a year from their retirement account - the first withdrawal will occur on their 65^th birthdays, and the 20^th and final withdrawal will occur on their 84^th birthdays.After their final withdrawal, the account is expected to have a zero value (i.e., they don't expect to have any remaining funds left for their children's inheritance).

Meghan and Zachary currently have $10,000 saved in a retirement account, which consists of a portfolio of mutual funds that is expected to produce an annual return of 9%.To accomplish their goals, they would like to deposit an equal annual amount into their account starting one year from today (on their 36^th birthdays) and continue to make those deposits through age 65.(Again, the account has an expected annual return of 9%.)Thus, they will make 30 annual end-of-year deposits to this account.

a.How much do Meghan and Zachary need to contribute to the account at the end of each of the next 30 years to accomplish their goals?

b.If they wanted to leave their children $1,000,000 for inheritance when they die at age 85, how much would they need to contribute to the account at the end of each of the next 30 years?(Assume everything else stays the same.)

c.If they instead expected to earn only 8% a year from their mutual funds, how much would they need to contribute to the account at the end of each of the next 30 years?(Continue to assume that they want to have $1,000,000 available for inheritance when they die at age 85.)