An Accounting Student in Her First Year of College Who

question 119

Short Answer

An accounting student in her first year of college who is working on a 4-year degree receives from her parents $200 in her first year. As an incentive to encourage her to graduate, they promise that in the second year she will receive double the amount of the first year, and in the third year she will receive double the amount of the second year. In her fourth year, she will receive $1,000. If she invests her yearly gifts at a rate of 4% as she receives them, compare the value of the investment after five years with the value of the gift (present value). What is the investment loss if the gift is not invested?
Future Value of $1
Future Value of Annuity of $1

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Definitions:

Thorndike

An American psychologist known for his work in the field of learning, particularly the law of effect.

Skinner

Refers to B.F. Skinner, a psychologist and behaviorist who developed the theory of operant conditioning, focusing on the consequences of behavior to shape future actions.

Primary Reinforcer

A stimulus that is naturally rewarding and satisfies a basic biological need, such as food or water.

Biological Need

Basic physical requirements for human survival, such as food, water, air, shelter, and sleep, that are essential for maintaining health and well-being.