Determine the present value $P$ you must invest to have the future value $A$ at simple interest rate $r$ after time $t$ .
$A = $ 16, 000, r = 6.5 %, t = 4 years$

The present value that must be invested is $$ ◻$ . (Round up to the nearest cent as needed.)

Answer

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Answer

$P = $ 12, 698.41$

Steps

Step 1 ：Convert the interest rate from a percentage to a decimal by dividing by 100: $r = 6.5 % = 0.065$

Step 2 ：Rearrange the formula for future value to solve for present value: $P = \frac{A}{1 + r t}$

Step 3 ：Substitute the given values into the formula: $P = \frac{$ 16, 000}{1 + 0.065 \times 4}$

Step 4 ：Simplify the equation: $P = \frac{$ 16, 000}{1 + 0.26}$

Step 5 ：Calculate the present value: $P = \frac{$ 16, 000}{1.26}$

Step 6 ： $P = $ 12, 698.41$