Answer:
The correct answer is $39,062.98.
Explanation:
According to the scenario, the given data are as follows:
Future value (FV) = $85,000
Time period (t) = 12 months × 10 years = 120 months
Interest rate (r) = 0.65% per month
So, we can calculate the present value by using following formula:
Present value = Future Value ( 1 / (1+r))^t
= 85000 × (1 / (1+0.65%))^120
= $39,062.98
Hence the present value that has to be deposit today is $39,062.98
