(Ignore Income Taxes in This Problem

question 5

Multiple Choice

(Ignore income taxes in this problem.) Henry wants to send his son to computer school which will start one year from today. Payments of $2,000 are due at the end of each of the next two years. What lump-sum will Henry have to invest now at 12% per year in order to have $2,000 at the end of each of the next two years?

• A) $4,240
• B) $3,380
• C) $1,594
• D) $2,508

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Definitions:

Friction

A force that opposes the movement of two surfaces that are in contact with each other.

Adaptation

The process by which organisms adjust to their environment in order to survive and reproduce, including changes in structure, function, or behavior.

Limbs

Appendages on the human body or on other animals, used for movement or manipulation.

Walk

The act of moving at a regular pace by lifting and setting down each foot in turn, never having both feet off the ground at once.