Paul Adams owns a health club in downtown Los Angeles. He charges his customers an annual fee of $540 and has an existing customer base of 570. Paul plans to raise the annual fee by 6 percent every year and expects the club membership to grow at a constant rate of 3 percent for the next five years. The overall expenses of running the health club are $122,000 a year and are expected to grow at the inflation rate of 2 percent annually. After five years, Paul plans to buy a luxury boat for $480,000, close the health club, and travel the world in his boat for the rest of his life. Assume Paul has a remaining life of 25 years and earns 9 percent on his savings.

• How much will Paul have in his savings on the day he starts his world tour assuming he has already paid for his boat?

• What is the annual amount that Paul can spend while on his world tour if he will have no money left in the bank when he dies?