Lucy and Fred Want to Begin Saving for Their Baby's

question 119

Multiple Choice

Lucy and Fred want to begin saving for their baby's college education. They estimate that they will need €200,000 in eighteen years. If they are able to earn 6% per annum, how much must be deposited at the beginning of each of the next eighteen years to fund the education?

• A) €6,471
• B) €6,105
• C) €11,111
• D) €5,924

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Definitions:

Potential Buyers

Individuals or entities that show interest in purchasing a product or service but have not yet completed the transaction.

Rustbucket

A term colloquially used to describe an old, dilapidated vehicle, especially one suffering from rust and decay, indicating poor condition.

Used Cars

Pre-owned vehicles that have been previously registered and are available for sale, usually at a lower price than similar new models.

Equilibrium

A state in which supply and demand are balanced, often referring to market equilibrium in economics.