Answer:
$18,255.48
Explanation:
In this question, we have to calculate the present value which is shown below:
As we know that
Future value = Present value × (1 + interest rate)^number of years
$40,000 = Present value × (1 + 0.04)^20
$40,000 = Present value × 2.191123143
So, the present value is
= $40,000 ÷ 2.191123143
= $18,255.48
The interest rate is 8% ÷ 2 = 4%
And, the time period is 10 years × 2 = 20 years
