Here are two future expenses that you want to save for today: $5,300 payable in 3 years, and $7,100 payable in 10 years. You make an investment today that perfectly finances the future expenses if the investment earns a target 17.9% average annual rate of return (compounded annually).

The investment indeed grows sufficiently to finance your first expense. Unfortunately, for the entire investment horizon your actual annual rate of return falls short of the target by 160 basis points per year. When it is time to pay the second expense, how much money do you lack?

-$1,671

-$1,141

-$1,381

-$1,519

-1,256

$1,519