Answer:
it will need 38.03 year of saving to retire given the current contribution and interest rate.
Explanation:
We set up the annuity and sovle for n:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C $8,000.00
time n
rate 0.085
PV $2,000,000.0000
[tex]8000 \times \frac{(1+0.085)^{n} -1}{0.085} = 2000000\\[/tex]
[tex](1+0.085)^{n}= \frac{2000000\times0.085}{8000} + 1 [/tex]
Once we reach this point, we solve for n using logarithmic properties:
[tex]n= \frac{log 22.25}{log(1+0.085)[/tex]
n = 38.03
