Susie and Tim Are Twins

question 136

Essay

Susie and Tim are twins. Susie invests $5,000 at age 20 and earns 5% compound interest. Tim invests $10,000 at age 40 and earns 5% compound interest. No matter how long they live, Tim will never have as much money as Susie. Explain why.

---

Definitions:

Dominant Strategy

In game theory, a strategy that is optimal for a player, irrespective of what the opponent does.

High Price

A price level that is considered to be above the average or standard pricing for a product or service in the marketplace.

Maximized Profits

The situation in which a firm or business achieves the highest possible profit level given its production costs and market conditions.

Davy Crockett Figurines

Collectible items representing the historical figure Davy Crockett, often sought after by collectors and enthusiasts.