Problem
You have just inherited a large sum of money and you are trying to determine how much you should save for retirement and how much you can spend now. For retirement. you will deposit today (January 1. 2022) a lump sum in a bank account paying 8 percent compounded annually. You don't plan on touching this deposit until you retire in ?ve years (January 1. 2027]. and you plan on living for 20 additional years. During your retirement. you would like to receive income of 550.000 per year to be received the ?rst day of each year. with the ?rst payment on January 1. 202?. and the last payment on January 1. 2046. Complicating this objective is your desire to have one ?nal three-year fling. during which time you'd like to track down all the original members of The Han'y Potter Series and get their autographs. To finance this. you want to receive $250,000 on January 1. 2042. and nothing on January 1. 2043. and January 1. 2044. as you will be on the road. In addition. after you pass on {January 1. 204?}. you would like to have a total of 5130.000 to leave to your children.
How much must you deposit in the bank at 8 percent per annum compounded annually on January 1. 2022, in order to achieve you goal.