Jason Inherited $6 000 from His Grandfather

Multiple Choice

Jason inherited $6 000 from his grandfather. He decided to invest the money in a two-year project that promised a return of $2 000 by the end of this year and $4 500 at the end of the next year. Jason read an analytical report that inflation is going to be 3.0% over the next 5 years. He decided that he would only invest in this project if it could give him at least 10% real rate of return. What is the present worth of his investment under this rate of return?

A) $183
B) -$873
C) -$462
D) -$729
E) $5 289