Multiple Compounding (PV): Marcie Witter Is Saving for Her Daughter's

question 5

Multiple Choice

Multiple compounding (PV) : Marcie Witter is saving for her daughter's college education. She wants to have $50,000 available when her daughter graduates from high school in four years. If the investment she is considering will pay 8.25 percent compounded monthly, how much will she have to invest today to reach her target? (Round to the nearest dollar.)

• A) $35,987
• B) $49,659
• C) $41,275
• D) $36,450

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Definitions:

6-Sided Dice

A cube with numbers from 1 to 6 on each side, used in games of chance to generate random numbers.

Histogram

A graphical representation of the distribution of numerical data, typically showing the number of data points that fall within a range of values, divided into bins or intervals.

Simulation

The act of mimicking the operation of a real-world process or system over time, often via computer models.

Central Limit Theorem

A fundamental theorem in statistics stating that the distribution of sample means approaches a normal distribution as the sample size increases, regardless of the population's distribution.