Question 4: In typical retirement plans, an individual usually pays a small annual amount of money (CF1) for a period of time (nu in years) in order to be eligible for a retirement pension of CF2 which lasts (on average) for a period of n2 years (see the sketch). CF2 CF1 Organizations that finance the retirement pension try to balance the cash flow at the time of retirement (at ni) by finding the right amounts of CF1 and CF2. To finance reasonable retirement plans, let us study the tradeoffs between the model parameters as follows: 1. Find the ratio CF1 to CF2 if n1=n2. 2. If n1=n2=20 years, and the interest rate=8%, what would be the value of this ratio. 3. Would it be possible for this ratio to be 1, Why? 4. By neglecting the time value, do you think the individuals pay more/less than what they get from the retirement pension. (Assume nin2). 5. Sketch the above ratio as a function of n where n=n=n2 for an interest rate of 8%