Suppose That a Young Couple Has Just Had Their First

question 87

Multiple Choice

Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education.They decide to make deposits into an educational savings account on each of their daughter's birthdays,starting with her first birthday.Assume that the educational savings account will return a constant 7%.The parents deposit $2000 on their daughter's first birthday and plan to increase the size of their deposits by 5% each year.Assuming that the parents have already made the deposit for their daughter's 18th birthday,then the amount available for the daughter's college expenses on her 18th birthday is closest to:

• A)$42,825.
• B)$97,331.
• C)$67,998.
• D)$103,063.

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Definitions:

Prepurchase Cognition

The thought processes and considerations of consumers before making a buying decision, including research, evaluation of alternatives, and the influence of attitudes and beliefs.

Problem Recognition

The initial step in the buying process, where a consumer identifies a need or a problem that requires a solution.

Alternative Evaluation

The stage in the consumer decision process where options are assessed before making a purchase decision.

Information Search

The process by which individuals seek out and gather relevant information to satisfy a particular need or decision.