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

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 Eric and Karinna 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) $11,471
B) $ 4,323
C) $79,977
D) $17,350