Your current client Sam is about to retire and they have $1.2 million of investment capital available. You have calculated his statistical life expectancy of 22 years however in order to allow a buffer you and the clients agree that they would like their funds to provide for them for 27 years. Assume a nominal rate of return of 6.5% p.a. and inflation of 2.5% p.a. (you can ignore tax as the investment will be held in a superannuation pension fund) and that they are happy to use up the returns and all of the initial lump sum over 27 years. Calculate the amount of income can they draw each year in real terms at the end of the year over the 27 years and show your workings.