Jimmy Carpenter, a self-employed individual, is opening a retirement account at a bank. His goal is to accumulate $1,000

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Jimmy Carpenter, a self-employed individual, is opening aretirement account at a bank. His goal is to accumulate $1,000,000in the account by the time he retires from work in 20 years ‘time.A local bank is willing to open a retirement account that pays 8%interest compounded annually throughout the 20 years. Jimmy expectsthat his annual income will increase 6% yearly during his workingcareer. He wishes to start with a deposit at the end of year 1 andincrease the deposit at a rate of 6% each year thereafter.
a. What should be the size of his first deposit The firstdeposit will occur at the end of year 1, and subsequent depositswill be made at the end of each year. The last deposit will be madeat the end of year 20.
b. What is the value of A if the bank decides to decrease theinterest rate to 6% compounded annually.
answer letter b only (use manual calculation and present theexact formula)