Ruth H Wants to Build a House in 12 Years

question 60

Multiple Choice

Ruth H. wants to build a house in 12 years. She estimates that the total cost will be $350,000. If she can put aside $20,000 at the end of each year, what rate of return must she earn in order to have the amount needed, assuming annual compounding?

• A) between 11% and 12%
• B) between 8% and 9%
• C) 17%
• D) 6.63%

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Definitions:

Endocrine Glands

Glands of the endocrine system that release hormones directly into the bloodstream, regulating various bodily functions.

Realistic Optimists

Individuals who maintain a positive outlook on life while still being grounded in a realistic understanding of their situation or the world around them.

Exhaustion Phase

The final stage of the general adaptation syndrome, characterized by the body's depletion of resources after prolonged exposure to stress.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body goes through when exposed to chronic stress.