A home costs $350,000. Inflation is expected to be 5% (percent) per year over the next 20 years. How large an equal annual end-of-year deposit must be made into an account paying an interest of 13% in order to buy the house at the end of 20 years ________
$11,471, $4,323, $79,977, or $17,350
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We have to first the cost of the house at the end of 20 years. For this we find the future value of $ 350,000 at the end of 20 years rising ...
The solution explains how to calculate the future value using inflation and then the annual savings needed to get the future value