Suppose you are still committed to owning a $150,000 Ferrari (see Question 9). If you believe your mutual fund can achieve a 10.25 percent annual rate of return, and you want to buy the car in 10 years on the day you turn 30, how much must you invest today?

Question 9

You're trying to save to buy a new $150,000 Ferrari. You have $35,000 today that can be invested at your bank. The bank pays 3.2 percent annual interest on its accounts.