Suppose That a Young Couple Has Just Had Their First

question 75

Multiple Choice

Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for their child's college 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 $2000 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 college 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:

Imitated

Copied or reproduced someone's behavior, action, or expression, often to learn or fit in.

Adolescents

People undergoing the phase of both physical and mental growth that typically happens from puberty until reaching the age of legal maturity.

Observational Learning

The process of acquiring new behaviors or knowledge by watching and imitating others, also known as social learning.

Albert Bandura

A Canadian-American psychologist known for his work on social learning theory and the concept of self-efficacy.