Steve and Ed Are Cousins Who Were Both Born on the Same

question 51

Multiple Choice

Steve and Ed are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve on his 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate's trustee) Until now, the grandfather has been disappointed with Ed, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Ed. He will make the first payment to a trust for Ed today, and he has instructed his trustee to make 40 additional equal annual payments until Ed turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of 8%, how much must the grandfather put into Ed's trust today and each subsequent year to enable him to have the same retirement nest egg as Steve after the last payment is made on their 65th birthday?

• A) $3,726
• B) $3,912
• C) $4,107
• D) $4,313
• E) $4,528

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Definitions:

Parafollicular Cells

Cells in the thyroid gland that produce calcitonin, a hormone involved in calcium and phosphate metabolism.

Calcitonin

A hormone secreted by the thyroid gland that helps regulate calcium levels in the blood.

Blood Calcium

The level of calcium ions in the bloodstream, critical for various bodily functions including bone health, nerve transmission, and muscle function.

Neuroendocrine Cells

Cells that receive neuronal input and as a response, release message molecules (hormones) into the blood, functioning both as neurons and endocrine cells.