A Ski Chalet in Vail Now Costs $250,000 to Rent

Multiple Choice

A ski chalet in Vail now costs $250,000 to rent for a week during February. Inflation is expected to cause this price to increase at 5 percent per year over the next 10 years before Howard and his wife 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) $8,333
B) $13,572
C) $25,005
D) $22,109