1. Alyssa just won a law suit and plans to put the proceeds aside for her special brother so that he will have an income of $20,000 per year for the next 20 years. The account earns 6% compounded semiannually. How much should Alyssa pay for such an arrangement?
2. A man plans to work for 25 years, during which time he will set up a retirement fund by making end of month payments of 100 per month. The fund earns interest at a nominal interest rate of 6% convertible monthly. He will use the accumulated funds to purchase a 20-year retirement annuity. Assuming he can get 6% converted monthly on the annuity, what will his month payments be?