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

question 11

Multiple Choice

Lucy and Fred want to begin saving for their baby's college education. They estimate that they will need $100,000 in eighteen years. If they are able to earn 5% per annum, how much must be deposited at the end of each of the next eighteen years to fund the education?

• A) $3,873.
• B) $8,555.
• C) $8,274.
• D) $3,555.

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Definitions:

Psychosocial Development

A theory by Erik Erikson that proposes human development is a series of eight stages, from infancy to adulthood, with each stage marked by a psychological conflict that must be resolved for healthy personality development.

Identity

How individuals perceive themselves, including their beliefs, qualities, emotions, and expressions, which together form a person’s self-image or sense of self.

Stage

An identifiable time period in development or processes during which certain behaviors, experiences, or phenomena are more prevalent or potent.

Lawrence Kohlberg

An American psychologist best known for his theory of stages of moral development.