Unfortunately I do not agree with the answer provided by FutForFut.
In my opinion answer of 60 491,63$ can be correct under certain circumstances.
There is also another correct answer, but I cannot agree with answer of 81 474,88$.
More specifically. Problem was “I am paid $50,000 now, growing at 6% per year for a total of 10 years, but the discount rate is 4%, solve for the present value.”
Which implies that person received 50 000 today but decides to invest the amount for next 10 years. Nothing ambiguous here but when we look further then it’s not entirely clear what kind of investment is chosen.
Whether it’s “growing at 6%” or is it perhaps distributes 6% coupons/dividends annually.
In first case we are dealing with investment resembling zero-coupon bond.
In second case we have coupon bond or dividend stock kind of investment.
In both cases NPV-s are slightly different.
First zero-coupon bond:
As we can see, this is exactly the solution initially proposed by TrueWarrior09.
However, there could be alternative solution. If we assume that investment distributes cash flows annually (e.g. coupons or dividends) then cash flow pattern looks different.
So the 58 110,9 can be considered as alternative solution.
However, I cannot agree with solution proposed by FutForFut ($81 4747,88) because it erroneously assumes that 50 000 initially received qualifies as cash flow.
In our case received 50 000 is invested and therefore major cash flow appears only after 10 years.
Or alternately, if initially received 50 000 qualifies as cash flow then we don’t have capital to provide us any benefits (additional cash flows in our case) during next 10 years.