An individual, who is currently 30 years old, wants to work until he is 65 and plans on dying at the age of 85. Assuming that the current interest rate is 5% (and the rate is going to hold for the life of the individual), answer the following questions:
1) How much will the individual have to amass by the time he is 65 if he plans on spending $40,000 per year while retired and until he dies?
2) How much will the individual have to set aside each year while working before he hits the retirement age?