You are planning to purchase a used car. You have $5,500 to spend and you plan to drive the car for at least five years. The graph below shows the estimated long term cost of buying and owning two different cars. You are considering the gas, insurance, and maintenance costs of both cars. The yellow car will cost $2,000 initially and cost about $2,000 a year to maintain. The blue car will cost $5,000 and then cost about $1,000 a year to maintain.

Given that you plan to keep your car for at least five years, which statement below is TRUE?

Question 1 options:

A.) I should buy the blue car because by the time five years have passed, I will have saved almost $2,000.

B.) The graph shows that the yellow car will be worth more when I sell it.

C.) The graph shows that the costs of the two cars will be approximately equal in 4 years.

D.) I should buy the yellow car because I will never make up the extra $3,000 I paid for the blue car.