Fred is about to have his twenty-seventh birthday. He has set a goal of retiring at age 58 with $1,000,000 in his RRSP. For planning pur- poses, he is assuming that his RRSP will earn 8% compounded annually.
a. What contributions on each birthday from age 27 to 57 inclusive will be required to accumulate the desired amount in his RRSP?
b. If he waits five years before starting his RRSP, what contributions on each birthday from age 32 to 57 inclusive will be required to reach the target?