If you buy a car for $20,000 and sell it for $25,000, what is your profit?

To determine the profit from selling a car, you need to subtract the purchase price from the selling price. In this case, you bought the car for $20,000 and sold it for $25,000. The formula for calculating profit is straightforward:

Profit = Selling Price - Purchase Price

Plugging in the values:

Profit = $25,000 - $20,000 = $5,000

This calculation clearly shows that the profit made from the transaction is $5,000, making this the correct answer. Understanding this basic principle of profit calculation is essential for making informed financial decisions related to buying and selling assets.