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Having inherited a large amount of money, you are trying to determine how much you should save for retirement and how much you can spend
Having inherited a large amount of money, you are trying to determine how much you should save for retirement and how much you can spend now. For withdrawal, you will deposit today (January 1, 2010) a lump sum into a bank account that pays 10% compounded annually. You won't touch this money until you retire in 5 years (January 1, 2015), and you plan to live 20 more years. During retirement you want to receive an income of $ 50,000 per year to be received on the first day of each year, with the first payment on January 1, 2015 and the last payment on January 1, 2034. To complicate the situation it is your desire to pursue by three years to the original members of "Hey Dude" and those of "Saved by the Bell" and get their autographs. To fund this, you want to receive $ 250,000 on January 1, 2030 and nothing on January 1, 2031 or January 1, 2032, as you will be on the street looking for those actors. In addition, upon death on January 1, 2035, he would like to leave $ 100,000 for his children to distribute to him.
How much money do you have to deposit in the bank at 10% interest on January 1, 2010 to achieve your goal?
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