On January 1, 2012 Silverstein Ltd. purchased a machine. The seller agreed that a total of $12,000 would be paid over a three-year period--$4,000 per...

On January 1, 2012 Silverstein Ltd. purchased a machine. The seller agreed that a total of $12,000 would be paid over a three-year period--$4,000 per year at the end of 2012, 2013, and 2014. At the time the machine was purchased, the market rate of interest was 8%. What amount should be debited to the asset account, Machinery, on the date of purchase? (round to the nearest dollar)

$9,308

$8,308

Some other amount

$11,308

$10,308

The right answer is 10308, but I have no idea why they get this answer. Help!