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. Lester works during the time that Maurice attends graduate school. Each month, Lester saves $200 and deposits this amount into the $5000 money market account that his parents set up for him when he graduated. If Lester's initial balance is u0=5000,un is the current month's balance, and un−1 is last month's balance, write an expression for un in terms of un−1.

Question

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. Lester works during the time that Maurice attends graduate school. Each month, Lester saves $200 and deposits this amount into the $5000 money market account that his parents set up for him when he graduated. If Lester&#039;s initial balance is u0=5000,un is the current month&#039;s balance, and un−1 is last month&#039;s balance, write an expression for un in terms of un−1.

Clelioo · Accepted Answer

We know from item 10 that: (Account balance any month=un)=(account balance the month before=un−1)×1.0025+200 So, the equation becomes: un=un−1⋅1.0025+200

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

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