Answer:
The correct answer is B.
Explanation:
Giving the following information:
Cash flow= $2,250
n= 4
i= 5%
Additional investment= $3,000
First, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {2,250*[(1.05^4) - 1]} / 0.05
FV= 9,697.78 + 3,000
FV= $12,697.78
Now, the present value:
PV= FV/(1+i)^n
PV= 12,697.78/(1.05^4)
PV= $10,446.5
