Question

The principal needed now to get a given amount; that is, find the present value  to get $5000 after 2 1/4 years at 4% compounded daily the present value of $5000 is ? ( round to the nearest cent as needed )

Answer 1

To find the present value of $5000 after 2 1/4 years at 4% compounded daily, use the formula for compound interest.

Step-by-step explanation:

To find the present value of $5000 after 2 1/4 years at 4% compounded daily, we can use the formula for compound interest:

P = A / (1 + r/n)^(n*t)

Where P is the present value, A is the future value, r is the interest rate, n is the number of compounding periods per year, and t is the number of years. In this case, A = $5000, r = 0.04, n = 365, and t = 2.25.

Plugging in these values into the formula, we have:

P = 5000 / (1 + 0.04/365)^(365*2.25)

Solving this equation gives us P ≈ $4362.12 (rounded to the nearest cent).