Present Value: John Hsu Wants to Start a Business in 10

Multiple Choice

Present value: John Hsu wants to start a business in 10 years. He hopes to have $100,000 at that time to invest in the business. To reach his goal, he plans to invest a certain amount today in a bank term deposit that will pay him 9.50 percent annually. How much will he have to invest today to achieve his target? (Round to the nearest dollar.)

A) $54,233
B) $63,837
C) $91,324
D) $40,351