Answer:
present value = $3,571.43
Step-by-step explanation:
The formula for calculating the interest on an invested amount id given below:
simple interest = principal × rate × time of investment
future value = $5000
simple interest = 8% = 8/100 = 0.08
principal = present value = x
time = 5 years
∴ simple interest = 5,000 × 0.08 × 5 = $2,000
Future value = present value + simple interest
N:B; present value = principal
∴ simple interest = (future value) - (principal)
∴ (future value - principal) = principal × rate × time
(5000 - principal) = principal × 0.08 × 5
5000 - principal = 0.4(principal)
let principal = p
5000 = 0.4p + p
1.4p = 5000
p = 5000 ÷ 1.4 = 3,571.43
∴ present value = $3,571.43