Erbitux is a colorectal cancer treatment drug that is manufactured by ImClone Systems, Inc. Assume treatment takes place over a one-year period at a cost of $20,000 per quarter.
a. What is the total cost of treatment at the end of the year at an interest rate of 12% per year compounded quarterly?
b. If the patient lives 4 years after the treatment completed, how much would that person have to earn each quarter beginning 1 quarter after treatment ends in order to earn an amount equivalent to the total treatment cost at an interest rate of 12% per year compounded quarterly?