# Maurice and Lester are twins who have just graduated from college.

Sinead Mcgee 2021-06-23 Answered

Maurice and Lester are twins who have just graduated from college. They have both been offered jobs where their take-home pay would be $2500 per month. Their parents have given Maurice and Lester two options for a graduation gift. Option 1: If they choose to pursue a graduate degree, their parents will give each of them a gift of$35,000. However, they must pay for their tuition and living expenses out of the gift. Option 2: If they choose to go directly into the workforce, their parents will give each of them a gift of $5000. Maurice decides to go to graduate school for 2 years. He locks in a tuition rate by paying$11,500 for the 2 years in advance, and he figures that his monthly expenses will be $1000. Lester decides to go straight into the workforce. Lester finds that after paying his rent, utilities, and other living expenses, he will be able to save$200 per month. Their parents deposit the appropriate amount of money in a money market account for each twin. The money market accounts are currently paying a nominal interest rate of 3 percent, compounded monthly. At the end of 2 years, Lester receives a raise and decides to save $250 each month. Maurice receives a$5000 graduation gift from his parents and deposits this amount into his money market account. Maurice goes to work and saves \$500 each month. Complete the equations below for the money market account balance for each twin. Let the initial balance u0 be the account balance at the end of 2 years. Write an expression for this month's account balance un in terms of un−1. Recall that the interest rate for the account is 3 percent, compounded monthly. Maurice: $$u_{0}= 5248.47, u_{n}=?\ Lester: u_{0}=?, u_{n}=?$$.

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## Expert Answer

tabuordy
Answered 2021-06-24 Author has 13868 answers

Maurice $$u_{0}=5248.47$$
$$u_{n}=1.0025\ u_{n}-1+500$$
Lester $$u_{o}=10249.35$$
$$u_{n}=1.0025\ u_{n}-1+250$$

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