Determine the annual deposit required to fund a future annual annuity of $12,000 per year. You will fund this future liability over the next five years, with the first deposit to occur one year from today. The future $12,000 liability will last for four years, with the first payment to occur seven years from today.
If you can earn 8 percent on this account, how much will you have to deposit each year over the next five years to fund the future liability?