Final answer:
The present value of $6,000 due in two years at 9.5% simple interest is $5042.02. This was calculated by isolating the Present Value in the simple interest formula and solving for it.
Step-by-step explanation:
To find the present value using the future value formula and a calculator, we can use the formula of simple interest to work backwards. Given the future value (FV) is $6,000, the interest rate (r) is 9.5%, and the time (t) is two years, we can use the simple interest formula:
Future Value = Present Value + (Present Value × interest rate × time)
Let's isolate the Present Value (PV) in this formula:
PV + (PV × 0.095 × 2) = $6,000
Now, we calculate the PV:
PV × (1 + 0.095 × 2) = $6,000
PV × (1 + 0.19) = $6,000
PV × 1.19 = $6,000
PV = $6,000 / 1.19
PV = $5042.02
So, rounding to the nearest cent, the present value is $5042.02.