Problem:
On January 15, 2004, Grant Corp. adopted a plan to accumulate funds for environmental improvements beginning July 1, 2008, at an estimated cost of $2,500,000. Grant plans to make four equal annual deposits in a fund that will earn interest at 10% compounded annually. The first deposit was made on July 1, 2004. Future value factors are as follows:
Future value of 1 at 10% for 5 periods 1.61
Future value of ordinary annuity of 1 at 10% for 4 periods 4.64
Future value of annuity due of 1 at 10% for 4 periods 5.11
Grant should make four annual deposits of
a. $444,761.
b. $489,237.
c. $538,793.
d. $625,000.