Tom Has Two Investment Options

Multiple Choice

Tom has two investment options. He can either invest $3,000 in a friendʹs project or he can deposit the same amount in a bank that offers him an annual rate of interest of 6 percent. If he invests in his friendʹs project, he will receive $3,400 after 5 years.
-Refer to the scenario above. What is the present value of $3,400 to be received after 5 years?

A) $2,300.78
B) $2,540.68
C) $3,200.22
D) $3,526.44