Question

What amount needs to be invested today at 6% simple interest in order to have $4000 in 2 years?

Answer 1

Data:
A (amount) = ?
P (Principal) = $ 4000
r (rate) = 6% → 0.06
t (time) = 2 years

Formula:

`A = P(1+r*t)`

Solving:

`A = P(1+r*t)`

`A = 4000(1+0.06*2)`

`A = 4000(1+0.12)`

`A = 4000*1.12`

`\boxed{\boxed{A = \$\:4480}}\end{array}}\qquad\quad\checkmark`