You Are Saving for a Car and Have Decided You

question 23

Essay

You are saving for a car and have decided you can afford to deposit $5,000 into a savings account at the end of each of the next five years,at which point you will withdraw the money to purchase the car.You can deposit the money in a savings account that earns 8% interest with no annual fee,or you can choose a savings account that earns 10% interest,but has an annual fee of $100.00 that would come out of your deposits.
a.If you choose the free savings account,how much money will you be able to withdraw five years from now?
b.If you choose the savings account with a fee,how much money will you be able to withdraw five years from now?
c.Which option would be best for you financially?

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Definitions:

Aversive Conditioning

A type of behavior conditioning where an unpleasant or painful stimulus is used to reduce the likelihood of a behavior reoccurring.

Cognitive-behavioral Therapy

A psychotherapeutic treatment that helps patients understand the thoughts and feelings that influence behaviors, aiming to change negative patterns.

Virtual Reality Exposure Therapy

A psychological treatment method that uses virtual environments to expose individuals to stimuli related to their fears or traumas in a controlled manner.

Systematic Desensitization

A behavioral therapy technique used to reduce fear, anxiety, or phobias through gradual exposure to the feared object or situation.