Question

If i have $500 in my account after 4 years inventing at 2.5% per year, how much money did I start with?

A.) Write an equation showing your work.
B.) How much money was started with.

Answer 1

The equation is

P=A÷(1+r)^t

P present value?

A future value 500

R interest rate 0.025

T time 4years

P=500÷(1+0.025)^(4)=452.98