Julian and Jonathan Are Twin Brothers (And So Were Born

question 103

Multiple Choice

Julian and Jonathan are twin brothers (and so were born on the same day) .Today, both turned 25.Their grandfather began putting $2,500 per year into a trust fund for Julian on his 20th birthday, and he just made a 6th payment into the fund.The grandfather (or his estate's trustee) will make 40 more $2,500 payments until a 46th and final payment is made on Julian's 65th birthday.The grandfather set things up this way because he wants Julian to work, not be a "trust fund baby," but he also wants to ensure that Julian is provided for in his old age. Until now, the grandfather has been disappointed with Jonathan and so has not given him anything.However, they recently reconciled, and the grandfather decided to make an equivalent provision for Jonathan.He will make the first payment to a trust for Jonathan today, and he has instructed his trustee to make 40 additional equal annual payments until Jonathan turns 65, when the 41st and final payment will be made.If both trusts earn an annual return of 8%, how much must the grandfather put into Jonathan's trust today and each subsequent year to enable him to have the same retirement nest egg as Julian after the last payment is made on their 65th birthday?

• A) $3,726
• B) $3,912
• C) $4,107
• D) $4,313
• E) $4,528

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Definitions:

Baby's Posture

The typical positions or alignments adopted by an infant while sitting, standing, or lying.

Supported

Being provided with assistance, encouragement, or approval, either emotionally or materially.

Independently

The condition or quality of being able to act, make decisions, or operate without direct aid or influence from others.

Elementary Grades

The educational levels encompassing early childhood education, typically from kindergarten through fifth or sixth grade.