Richard invested $750,000 in a hedge fund with a 2/20 fee structure. The fund had a total of $15 million of assets under management and it returned 12% and 19% in the first and second years, respectively. Assume that management fees are paid at the beginning of each year and performance fees are paid at the end of each year in which they are applicable. How much will Richard pay in performance fees for the first two years, respectively?

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