Decide Whether the Statement Makes Sense

Essay

Decide whether the statement makes sense. Explain your reasoning.
-Paul figures that at today's prices he can live on $40,000 per year. Currently, banks are
offering an APR of 8%. So he says "if I build a retirement fund that gives me $500,000 by
the time I retire, then if the APR remained at 8% for ever, and if I lived for ever, I could live
on the interest alone for ever. That's because 8% of $500,000 is $40,000."