A "Little Seven" Accounting Firm Offers to Pay You a Year-End

Multiple Choice

A "little seven" accounting firm offers to pay you a year-end bonus of $5,000 for 3 years if you will accept employment with them and stay for the entire 3-year period. Which of the following amounts is closest to the present value of the bonus if the interest rate is 10%?

A) $5,000.
B) $11,270.
C) $12,434.
D) $15,000.
E) $31,576.