A Ski Chalet in Aspen Now Costs $250,000

Multiple Choice

A ski chalet in Aspen now costs $250,000. Inflation is expected to cause this price to increase at 5 percent per year over the next 10 years before Barbara and Phil retire from successful investment banking careers. 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 ski chalet upon retirement?

A) $25,005
B) $22,109
C) $8,333
D) $13,572