Question

Determine the present value P that must be invested to have the future value A at simple interest rate after time t. A= $4500 r= 16% t= 2 years Round up to the nearest cent

Answer 1

Step 1

Given; Determine the present value P that must be invested to have the future value A at simple interest rate after time t.

A= $4500 r= 16% t= 2 years

Round up to the nearest cent

Step 2

Future value is given as;

`A=P(1+r)^t`
`\begin{gathered} r=(16)/(100)=0.16 \\ A=\text{\$}4500 \\ t=2\text{ years} \end{gathered}`

Step 3

Answer;

`\text{ P=\$3344.23 to the nearest cent}`