Marilyn's Parents Have Agreed to Help Her Purchase a New

question 159

Essay

Marilyn's parents have agreed to help her purchase a new car upon graduation in four years.They have given her two choices.The first choice is that they will give her $4,000 each year for the next four years for her to invest herself.The second choice is that they will wait four years and give her $18,000.Marilyn can invest the money at a 4% rate.
Required:
a.Which option should Marilyn choose? Why?
b.If Marilyn can invest the money at 8%, which options should she choose? Why?

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Definitions:

Martin Luther King

An American Baptist minister and activist who became the most visible spokesperson and leader in the civil rights movement from 1955 until his assassination in 1968, known for advancing civil rights through nonviolence and civil disobedience.

Suburbs

Residential areas located on the outskirts of a city or large town, typically characterized by lower population density and more single-family homes than the urban center.

Rosa Parks

An African American civil rights activist known for her pivotal role in the Montgomery Bus Boycott, challenging racial segregation in public transportation.

Brown Decision

Refers to the landmark 1954 U.S. Supreme Court case Brown v. Board of Education, which declared state laws establishing separate public schools for black and white students to be unconstitutional.