Rate of inflation compounds just like any other rate

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A retirement home at Deer Trail Estates now costs $185,000. Inflation is expected to cause this price to increase at 6% annually over the next 20 years. How large an equal, annual, end of year deposit must be made each year into an account paying an annual interest rate of 10% for the purchaser to have enough cash to purchase the home in 20 years? The rate of inflation compounds just like any other rate.

Reference no: EM13850364

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