A Small Foundry Agrees to Pay $250 000 Two Years

question 65

Multiple Choice

A small foundry agrees to pay $250 000 two years from now to a supplier for a given amount of coking 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)$29 740
• C)$31 250
• D)$29 770

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Definitions:

Secondary Chloride

An organic compound where the chloride ion (Cl-) is attached to a carbon atom that is itself directly bonded to exactly two other carbon atoms, typically more reactive than tertiary chlorides.

Isopropyl Iodide

An organic compound with the formula (CH3)2CHI, used as an alkylating agent in organic synthesis.

Vinylic Halide

A halogenated compound where the halide ion is directly bonded to an alkene carbon atom.

Androgen Agonist

A substance that binds to and activates androgen receptors, stimulating the effects of male hormones like testosterone in the body.