Step 1 :We are given that the future value (FV) is $5000, the annual interest rate (r) is 3% or 0.03 in decimal form, and the time (t) is 5 years. The interest is simple and compounded once per year.
Step 2 :We can calculate the present value (PV) using the formula: \(PV = \frac{FV}{(1 + r)^t}\)
Step 3 :Substituting the given values into the formula, we get: \(PV = \frac{5000}{(1 + 0.03)^5}\)
Step 4 :Calculating the above expression, we find that the present value (PV) is approximately $4313.04
Step 5 :\(\boxed{4313.04}\) is the amount that must be invested now to have $5000 in 5 years at an annual simple interest rate of 3%