You are 40 years old and want to retire at age

55.

Each year, starting one year from now, you will deposit an equal amount into a savings account that pays

7.2%

interest. The last deposit will be on your

55th

birthday. On your

55th

birthday you will switch the accumulated savings into a safer bank account that pays only

4%

interest. You will withdraw your annual income of

$120,000

at the end of that year (on your

56th

birthday) and each subsequent year until your

80th

birthday. On that birthday you want to give

$650,000

to your children. How much do you have to save each year to make this retirement plan happen?

How much do you have to save per year during your working years in order to achieve your retirement goal?

$nothing

(Round to the nearest cent.)