A Cash-Strapped Young Professional Offers to Buy Your Car with Four

A cash-strapped young professional offers to buy your car with four, equal annual payments of $3,000, beginning two years from today.Assuming you're indifferent to cash versus credit, that you can invest at 10 percent, and that you want to receive $9,000 for the car, should you accept?

A) Yes; present value is $9,510
B) Yes; present value is $11,372
C) No; present value is $8,645
D) No; present value is $7,461 PV = $3,000 [1/.1-1/(.1 (1.1) ⁴) ]/1.1
= $3,000 [10-6.8301]/1.1
= $3,000 [3.1699]/1.1
= $9,509.60/1.1