Todd currently has $5,000. What was the value of his money four years ago if he's earned
4 percent interest each year?

Question

Todd currently has $5,000. What was the value of his money four years ago if he's earned 
4 percent interest each year?

anonymous · Answer

future value=p x(1+i)t present value=p/(1+i)t

cwrw238 · Answer

i'm assuming its simple interest  right?

anonymous · Answer

yep that's right

cwrw238 · Answer

if his original sum was p dollars the 
p + 4*(0.04p) = 5000

1 .16p = 5000
p = 5000/1.16 =  4310.34 dollars

anonymous · Answer

nice, now this completely makes sense.... Thanks so much I have another one if you cold plz help If you invest $2,000 today in a bank that gives you a 4 percent annual interest rate, which of these items can you buy in seven years?

anonymous · Answer

a home theater system worth 3000 a designer dress worth 2700 or a mountain bike worth 2500 ?

cwrw238 · Answer

work out how much money you will get in 7 years

 2000 +interest  for 7 years
 = 2000 + 7*0.04* 2000

cwrw238 · Answer

what do you make that?

anonymous · Answer

I got 2,560

cwrw238 · Answer

right - so im afraid you cant buy your designer dress...

anonymous · Answer

aww, drat,, j/k so I guess I'll at least be able to buy the mountain bike

cwrw238 · Answer

but you can get fit with a mountain bike

anonymous · Answer

true

cwrw238 · Answer

lol

anonymous · Answer

you are funny

anonymous · Answer

If you save $3,000 at an interest rate of 
14 percent per year, how much will you have at the end of six years?

anonymous · Answer

3000 plus 6 times 0.14 x 3,000 right?

anonymous · Answer

I need help I don't think this is right

anonymous · Answer

A(t)=p(1+rt) 
use this formula