Joey’s parents plan on saving to pay for his college for the next 10 years. They prepare 3 sets of required deposits to a savings account based on that account earning 2%, 4%, or 6%. This is an example of sensitivity analysis.

Question

Quizplus · Accepted Answer

Sensitivity analysis involves changing one input variable at a time to see how it affects an outcome, in this case, the outcome is the future value of savings under different interest rates.

Joey’s Parents Plan on Saving to Pay for His College