Nan and Neal Are Twins

question 9

Multiple Choice

Nan and Neal are twins. Nan invests $5,000 at 7 percent at age 25. Neal invests $5,000 at 7 percent at age 30. Both investments compound interest annually. Both twins retire at age 60 and neither adds nor withdraws funds prior to retirement. Which statement is correct?

• A) Nan will have less money when she retires than Neal.
• B) Neal will earn more interest on interest than Nan.
• C) Neal will earn more compound interest than Nan.
• D) If both Nan and Neal wait to age 70 to retire they will have equal amounts of savings.
• E) Nan will have more money than Neal at any age.

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Definitions:

Top-Down

Top-down refers to cognitive processes guided by higher-level mental processes, as when we construct perceptions drawing from our experience and expectations.

Explicit Learning

A form of learning that involves conscious awareness in the acquisition of knowledge or skills, characterized by deliberate efforts to gain specific information.

Pavlov's Classical

A theory of learning that describes the conditioning process through which behaviors are associated with environmental stimuli.

Thorndike's Instrumental

A learning principle proposed by Edward Thorndike, emphasizing that behaviors followed by satisfying consequences are more likely to recur, whereas those followed by unpleasant consequences are less likely.