You just graduated, and you plan to work for 10 years and then leave for the Australian Outback bush country. You figure you can save $1,000 a year for the first 5 years and $2,000 a year for the next 5 years. These savings cash flows will start one year from now. In addition, your family has just given you a $5,000 graduation gift. You plan to put the gift now, and your future savings when they start, into an account which pays 8 percent compounded annually.

Based on the problem above, how much would your graduation gift of $5,000 be worth when you are ready to leave for Australia?

11,658

10,795

7,347

11,733