Assume That You Invest $750 at the End of Each

question 24

Multiple Choice

Assume that you invest $750 at the end of each quarter for the next 20 years in a mutual fund.The annual rate of interest that you expect to earn in this account is 5.25%.The amount in the account at the end of 20 years is

• A) $60,000.00
• B) $105,039.84
• C) $37,009.35
• D) $123,510.52
• E) $115,637.37

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Definitions:

Independence of Irrelevant Alternatives

A principle in decision theory stating that the preference between two options should not change because of the introduction of new alternatives.

Median Voter

A theoretical concept that suggests the outcome of a majority vote is most likely to represent the preferences of the voter who is in the middle of the political spectrum.

Majority Rule

A decision rule that selects alternatives which have a majority, that is, more than half the votes.

Median Voter Theorem

A political science theory suggesting that the outcome of a majority-vote election is most likely to represent the preferences of the median voter.