Answer:
The correct answer is $10,160.38
Explanation:
According to the scenario, the given data are as follows:
Future value = $12,350
Number of years (n) = 4 years
Discount rate (r) = 5%
Hence, Present value can be calculated by following formula:
Future value = Present value [tex]( 1 + r )^{n}[/tex]
$12,350 = Present value [tex]( 1 + 0.05 )^{4}[/tex]
Present value = [tex]\frac{$12,350}{1.05^{4} }[/tex]
Present value = $10,160.38
Hence, the correct answer is $10.160.38
