Suppose an Investor Invests $2,000 at the Beginning of Each

question 21

Multiple Choice

Suppose an investor invests $2,000 at the beginning of each year. What will be the value of the investment at the end of ten years if he earns ten percent?

• A) $31,875
• B) $35,062
• C) $13, 518
• D) $12,289
• E) $20,000

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Definitions:

Payroll Deductions

Amounts subtracted from an employee's gross pay for taxes, insurance premiums, or other benefits, leading to the net pay the employee receives.

Precommitments

Strategies or actions taken in advance to bind oneself to a specific course of action, often used to influence future decision-making or outcomes.

Present Consumption

The use of goods and services for immediate satisfaction or needs, as opposed to saving or investing for future use.

Behavioral Economists

Economists who study the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.