John Adams is the CEO of a nursing home. His is 50 years old now and plans to retire in 10 yrs. Plans to live 25 yrs after he retires to age 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today. His retirement income will begin the day he retires in 10 years and he will receive 24 additional annual payments. Inflation is expected to be 5% per yr for 10 years. He currently has $100,000 saved and he is expected to earn a return on his savings of 8% per year, annual compound. To the nearest dollar, how much must he save during each year for the next 10 years, with a deposit made at the end of each year to meet his retirement goal?
