Answer:
The correct answer is A.
Explanation:
Giving the following information:
Annual payment= $6,000
Number of payments= 8
Total years to PV= 12
Interest rate= 10%
First, we need to calculate future value:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {6,000*[(1.1^8) - 1]} / 0.06
FV= $114,358.88
Now, the present value:
PV= FV/(1+i)^n
PV= 114,358.88/1.1^12
PV= $36,438.26
