Question

Determine the present value, P, that you must invest to have the future value, A, at simple interest rate r after time t. Do not round until the final answer; then, round to the nearest cent.

A = $16,000, r = 11.5%, t = 5 years

Answer 1

\[A=P(1+r)^t \implies P=\frac{A}{(1+r)^t}.\]
Just plug the values you have for A,r and t. (Note r=11.5%=0.115)

Answer 2

Thank you!

Answer 3

Glad to help!