A couple want to retire together 15 years from today. They have managed to save $50,000 at the bank presently earning 5.15% interest per annum, compounding monthly. The couple will also start contributing $3,000 per month to their retirement. The couple has estimated that on retirement they would need a lump sum of $1,200,000 to support them in a reasonably comfortable lifestyle for 20 years. The couple have 3 investment options 1. Keep their present and future savings in the bank, earning the present rate of interest of 5.15%. 2. Invest in the securities of Investment House, with an average return of 10% per annum, compounding monthly. The financial broker will receive commissions of 2% of the value of invested funds. 3. Invest in the securities of Financial Solutions, with an average return of 14% per annum, compounding monthly. The financial broker will receive commissions of 4% of the value of invested funds. a. Assuming the rate of return remain the same for each option, how long would it take to raise the $1,200,000 for each of the 3 investment options? i. For options 1, 2 and 3 calculate based on leaving the present $50,000 at the bank earning 5.15% interest per annum, compounding monthly. ii. For investment option 2 and 3, also calculate based on withdrawing the $50,000 from the bank and investing this into securities of option 2 and 3. b. Which, if any, option would allow them to reach their $1,200,000 goal in 15 years? c. With the option(s) that allow the couple reach their goal of $1,200,000 in 15 years, assume that after retirement the interest rate will be 5.15% per annum, compounding annually. What would be the regular sum the couple would be able to withdraw each year for 20 years of retirement? d. What is the effective annual return from Financial Solutions securities? e. Explain what compounding is and how it impacts on the calculations in Questions a i, a ii, b and c