If Four Years of College Is Expected to Cost $150,000

question 96

Essay

If four years of college is expected to cost $150,000 18 years from now, how much must be deposited now into an account that will average 8 percent annually in order to save the $150,000? By how much would your answer change if you expected 11 percent annually?

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Definitions:

Erik Erikson

A developmental psychologist known for his theory on the psychosocial development of humans, identifying eight stages from infancy to adulthood.

Intimacy Versus Isolation

The sixth of Erikson’s eight stages of development. Adults seek someone with whom to share their lives in an enduring and self-sacrificing commitment. Without such commitment, they risk profound aloneness and isolation.

Big Five Traits

A model describing five major dimensions of human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Agreeableness

A personality trait characterized by altruism, trust, kindness, affection, and other prosocial behaviors.