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?

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 other answers are correct.