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A Beach House in Southern California Now Costs $350,000

Question 13

Multiple Choice

A beach house in southern California now costs $350,000. Inflation is expected to cause this price to increase at 5 percent per year over the next 20 years before Louis and Kate retire from successful careers in commercial art. How large an equal annual end-of-year deposit must be made into an account paying an annual rate of interest of 13 percent in order to buy the beach house upon retirement?


A) $79,977
B) $17,350
C) $4,323
D) $11,471

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