Sagheer Is Setting Up a Fund to Help His Grandson's

question 18

Multiple Choice

Sagheer is setting up a fund to help his grandson's university education. He wants his grandson to be able to withdraw $3000 every 3 months for 3 years after he starts university. His first withdrawal will be 5 years from now. If the fund can earn 7.2% compounded quarterly, what single amount contributed today will provide for the withdrawal?

• A) $32 119
• B) $22 083
• C) $52 077
• D) $42 041
• E) $36 000

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired: a response which is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Behaviorists

Psychologists who focus on observable behaviors and the ways in which they're learned, rather than on emotions or thoughts.

Observable Events

Phenomena or occurrences that can be seen or measured directly by an observer.

Learning

A relatively permanent change in behavior (or behavioral potential) due to experience.