Beth and Nelson want to accumulate a combined total of $600,000 in their RRSPs by the time Beth reaches age 60, which will be 30 years from now. They plan to make equal contributions at the end of every six months for the next 30 years. For planning purposes, assume that their RRSPs will earn 5% compounded semiannually for the next 30 years.

a. What should be their combined semiannual RRSP contributions?

b. What monthly amount can they expect to receive if they use the $600,000 in their RRSPs 30 years from now to purchase an annuity that will provide end-of-month payments for 25 years?

Assume that the funds used to purchase the annuity will earn 3% compounded monthly.