Problem: Jonathan and Beth plan on retiring in 15 years. They have made progress on their retirement portfolio (they currently have $100,000 in their 401ks + IRAs), but need to do more. Recognizing their lack of planning they have come to you for help in determining how much they need to save annually to produce an inflation-adjusted equivalent of $50,000 per year paid at the beginning of each your over 20 years of retirement. Moreover, they would like to leave a flat $1 million (not increased for any inflation) to their children. Upon further discussion, you and your clients assume that inflation will average 3% prior to retirement and 4% thereafter. Further, your clients estimate that they will earn 12% per year prior to retirement and 7% per year during retirement. Based on the above data assumptions provide your clients with answers to the following questions. The Havertons are quite concerned that they will be unable to contribute that much to their retirement accounts, especially for the first 10 or 15 years. Reacting to their concern you suggest a serial payment strategy. You explain to them that the contributions can be calculated so that each year increases by the amount of inflation. That will eliminate some of the early-year budgeting stresses associated with level payments. The Havertons are impressed by your suggestion and expertise and anxiously await your analysis. Answer the following questions based on the lump sum need you calculated for part one of this case study. Question 2.1 What is the amount of the first serial payment the Havertons will make at the end of year one? Question 2.2 What is the amount of the second serial payment the Havertons will make at the end of year two?