You Want to Buy a Volvo in Seven Years

Multiple Choice

You want to buy a Volvo in seven years. The car is currently selling for $50,000, and the price will increase at a compound rate of 10% per year. You can presently invest in high-yield bonds earning a compound annual rate 14% per year. How much must you invest at the end of each of the next seven years to be able to purchase your dream car in seven years?

A) $8,831.46
B) $9,080.20
C) $9,125.42
D) $9,282.09