Your Friend John Started College at the Age of 18

question 115

Multiple Choice

Your friend John started college at the age of 18 with $63,450 already saved,because 18 years ago when he was born his parents placed money into a special college savings account earning 7.25% per year.How much money did John's parents place into his college account?

• A)$18,000
• B)$3,525
• C)$17,262
• D)$5,824

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Definitions:

Par Value

The face value of a bond or stock, representing the amount the issuer agrees to pay at maturity (for bonds) or as an arbitrary value assigned to shares.

Debt Relationship

The connection between borrowers and lenders, specifying the terms under which debt capital is lent and must be repaid.

Issuing Company

A company that releases or sells financial instruments like stocks and bonds to raise capital from public or private investors.

Laboratories of Democracy

A concept that states can experiment with policies and solutions, serving as prototypes for national legislation.