Edward Wishes to Save Enough Money to Purchase a Retirement

Multiple Choice

Edward wishes to save enough money to purchase a retirement lake cabin.He is willing to spend $500,000 for the cabin and he can save $25,000 per year and invest the money into an account earning 8.00% per year.If Edward's investments come in the form of equal annual end-of-the-year cash flows and the first cash flow is in exactly one year,how long will it take him to save enough money to buy the lake cabin?

A) Between 8 and 9 years
B) Between 10 and 11 years
C) Between 12 and 13 years
D) Exactly 20 years