Two Brothers Each Open IRAs in 2009 and Plan to Invest

question 33

Multiple Choice

Two brothers each open IRAs in 2009 and plan to invest $3,000 per year for the next 30 years.John makes his first deposit on January 1,2009,and will make all future deposits on the first day of the year.Bill makes his first deposit on December 31,2009,and will continue to make his annual deposits on the last day of each year.At the end of 30 years,the difference in the value of the IRAs (rounded to the nearest dollar) ,assuming an interest rate of 7% per year,will be

• A) $19,837.
• B) $12,456.
• C) $6,300.
• D) $210.

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Definitions:

Plane Crash

An event wherein an aircraft sustains such damage from an in-flight incident that it is unable to continue flight, often leading to injury or loss of life.

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A simple probabilistic experiment to demonstrate the concept of randomness and chance, often used to illustrate the principle of a 50/50 chance in binary outcomes.

Addition Rule

A principle in probability stating that the probability of the occurrence of at least one of two events is the sum of their individual probabilities, minus the probability of both occurring together.

Possible Outcomes

The set of all distinct outcomes that can result from a particular statistical experiment or random event.