Answer:
This question is missing the Tom's marginal tax rate.
So, I assume it will be 35%
ATRR= 0.052; 8yrs: 187,514, 20yrs: 344,528
Explanation:
ATRR = (.08 x (1 - 0.35) = 0.052 ;
8yrs = $125,000 x (1.052)^8 = 187,514
20yrs = $125,000 x (1.052)^20 = 344,528
