Your Grandmother Has Promised to Give You $2,000 at the End

Multiple Choice

Your grandmother has promised to give you $2,000 at the end of each of the next four years if you earn Cs or better in all of your courses each year. Using a discount rate of 8% and the table below, what is the present value of the gift?
$\begin{array}{|l|l|l|l|l|l|l|}\hline\text { Present } \\\text { Value of an} \\\text { Annuity of }\\\$ 1\\\hline & 5 \% & 6 \% & 7 \% & 8 \% &9 \% & 10 \% \\ \hline 1& 0.95 & 0.943 & 0.935 & 0.926 & 0.917 & 0.909 \\\hline 2& 1.859 & 1.833 & 1.808 & 1.783 & 1.759 & 1.736 \\\hline 3& 2.723 & 2.673 & 2.624 & 2.577 & 2.531 & 2.487 \\\hline 4 & 3.546& 3.465 & 3.387 & 3.312 & 3.240& 3.170 \\\hline 5 & 4.329 & 4.212 & 4.100& 3.993 & 3.890& 3.791 \\\hline\end{array}$

A) $5,612
B) $5,900
C) $6,109
D) $6,624