You want to buy a new car in five years. You want to have saved $26,000 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.

Multiple Choice

None of the answers is correct.

No. You are short $3,452.

No. You are short $2,520.

Yes. You have $2,520 more than you need.

Yes. You have $3,452 more than you need.