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? $4,274.02 $4,113.51 $4,109.64

Answer 1

Answer: $4,274.02

Step-by-step explanation:

Given: The amount Todd has currently (P) = $5,000

The rate of interest (r) = 4%=0.04

Let the amount of money he has four years ago be x.

The formula to calculate compound amount after x years is given by :-

$A=P(1+r)^x\\\\\Rightarrow\ 5,000=P(1+0.04)^4\\\\\Rightarrow\ 5,000=P(1.04)^4\\\\\Rightarrow\ 5,000=P(1.16985856)\\\\\Rightarrow P=\frac{\ 5,000}{1.16985856}=\ 4274.02095515\approx\ 4,274.02$

Hence, the amount of money he has four years ago = $4,274.02

Answer 2

A=p(1+r)^t
5000=p(1+0.04)^4
P=5,000÷1.04^(4)
P=4,274.02