Chapter 5.3, Problem 27E

Jeanne and Harold Kimura want to set up a TDA that will generate sufficient interest at maturity to meet their living expenses, which they project to be $\$950\text{per}\text{month}$.

a. Find the amount needed at maturity to generate $\$950\text{per}\text{month}$ interest if they can get $6\frac{1}{2}\%$ interest compounded monthly.

b. Find the monthly payment that they would have to put into an ordinary annuity to obtain the future value found in part (a) if their money earns $8\frac{1}{4}\%$ and the term is thirty years.