You Want to Buy a New Car in fiVe Years

Multiple Choice

You want to buy a new car in five years.You want to have saved $25,000 by then.You can invest $4,000 at the end of each of the next five years at an interest rate of 6% compounded annually.Will you have enough money at the end of the fifth year? Use appendix Table 1, Table 2, Table 3 and Table 4.

A) No.You are short $2,452.
B) Yes.You have $1,532 more than you need.
C) No.You are short $1,532.
D) Yes.You have $2,452 more than you need.
E) None of the answers is correct.