John is eagerly waiting for his inheritance from his Father Greg. John wants to take a trip to Mexico. Greg promised John that 3 years from now (2023), he will start to pay out to John under the following year-end schedule:

Year 1-3 (2023-2025): $10,000 per year (ordinary annuity)

Year 4 (2026): $15,000

Year 5 (2027): $18,000

John has $4,000 (2020). He called his travel agent and found out his trip is expected to cost $75,000 at the end of 2027.

Will John have enough money saved up to go?

Both John and Greg expect to earn 5% per year on their money.

Use the table if needed.

I = 5% Table

I = 5% FVF PVF FVA PVA

N = 1 1.050 0.952 1.000 0.952

N = 2 1.103 0.907 2.050 1.859

N = 3 1.158 0.864 3.153 2.723

N = 4 1.216 0.823 4.310 3.546

N = 5 1.276 0.784 5.526 4.329

N = 6 1.340 0.746 6.802 5.076

N = 7 1.407 0.711 8.142 5.786