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, 2008] a lump sum in a bank account paying 10% compounded annually. You don’t plan on touching this deposit until you retire in 5 years [January 1, 2013] and you plan on living for 20 additional years until December 31, 2033. During your retirement you would like to receive income of $36,000.00 per year to be received the first day of each year, with the first payment on January 1, 2013, the last payment on January 1, 2032. Complicating this objective is your desire to have one final three-year fling during which time you’d like to track down all the original members of "Leave It to Beaver" and "The Brady Bunch" and get their autographs. To finance this you want to receive $275,000.00 on January 1, 2028, and nothing on January 1, 2029 and 2030. [Hint: This $275,000.00 cash flow replaces the $36,000.00 cash flow on this date and the $36,000.00 cash flows for the next two years.] You also wish to leave a total of $82,000.00 for your children in your will on January 1, 2033.

How much must you deposit in the bank at 10% on January 1, 2008 to achieve your goal? [A timeline will help to answer this question.]