Suppose That a Young Couple Has Just Had Their First

question 6

Multiple Choice

Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's university education.They decide to make deposits into an educational savings account on each of their daughter's birthdays,starting with her first birthday.Assume that the educational savings account will return a constant 7%.The parents deposit $2,000 on their daughter's first birthday and plan to increase the size of their deposits by 5% each year.Assuming that the parents have already made the deposit for their daughter's 18th birthday,then the amount available for the daughter's university expenses on her 18th birthday is closest to:

• A) $42,825
• B) $97,331
• C) $67,998
• D) $103,063

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Definitions:

Criteria

Standards or rules by which something is judged or assessed.

Tolerance

The willingness to accept feelings, habits, or beliefs that are different from one's own.

Alcohol

A chemical compound, typically a volatile, flammable liquid, often used in beverages for its psychoactive effects or industrially as a solvent.

Immunity

The biological ability of an organism to resist diseases, infections, or unwanted biological invasions, often through the presence of antibodies.