Suppose that you are now 30 and that you would like $2 million at age 65 to fund your retirement. You would like to save each year an amount that grows by 5% each year (that is, if you save $1 this year, you will save $1.05 next year).
Assume that the discount rate is 8%. How much should you start saving at the end of this year?
(Hint: first calculate the present value of the $2 million, then use the growing annuity formula to calculate the amount you must save at the end of this year).