Garth Inherited $25,000

question 29

Multiple Choice

Garth inherited $25,000. He needs to decide now much to spend now and how much to save for later. If he saves the money, then he can earn 15% interest on the total before he spends it. Using the information about his marginal utility in the table below, Garth should:

• A) spend $5,000 now and $22,250 in the future
• B) spend nothing now and $28,750 in the future
• C) spend $15,000 now and $13,500 in the future
• D) spend $10,000 now and $16,750 in the future

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Definitions:

Nonrestrictive

Used to describe modifiers, especially clauses, that provide additional information without limiting or defining the subject.

Restrictive Clause

A clause that limits or defines more closely the subject it modifies, essential to the meaning of the sentence.

Tex-Mex

A cuisine that combines elements of Mexican and Texan food, known for its use of melted cheese, meat, and spices.

Guacamole

Guacamole is a traditional Mexican dip made from mashed avocados, onions, tomatoes, and seasoning, often enjoyed with chips or as a condiment.