You Want to Have $35,000 in Cash to Buy a Car

question 51

Multiple Choice

You want to have $35,000 in cash to buy a car 4 years from today. You expect to earn 8 percent, compounded annually, on your savings. How much do you need to deposit today if this is the only money you save for this purpose?

• A) $23,618.92
• B) $24,511.68
• C) $25,726.04
• D) $26,013.01
• E) $26,311.15

---

Definitions:

Simple Interest

Interest calculated merely on the primary sum, or on the part of the primary sum that remains unsettled.

Nearest Cent

Rounding an amount to the closest cent, often used in financial transactions to ensure accuracy.

One Decimal Place

A numerical value rounded to a single digit following the decimal point.

Compound Interest

A method where interest is accrued both on the initial sum either deposited or loaned out, and also on the interest that has built up over prior periods.