A Small Foundry Agrees to Pay $250,000 Two Years from Now

question 57

Multiple Choice

A small foundry agrees to pay $250,000 two years from now to a supplier for a given amount ofcoking coal. The foundry plans to deposit a fixed amount in a bank account every three months, starting three months from now, so that at the end of two years the account holds $250,000. If the account pays 5.5% APR compounded monthly, how much must be deposited every three months?

• A) $29,777
• B) $29,770
• C) $29,740
• D) $31,250

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