Help on this finance problem : The formula A = P(1+ r)^t can be used to...

[~t~]

...relate the future value A of a deposit? of P dollars in an account that earns an annual interest rate r ( expressed as a decimal ) after t years. How much would you have to deposit today in order to have $5000 in 5 years in a bank account that pays 4% annual interest?

 

[teresa_katherine]

A is $5000
t is 5
r is 0.04
So
5000 = P(1 + 0.04)^5
5000 = P*1.22
P = 5000/1.22
P = 4098.36
So you have to deposit $4098.36 to have $5000 after 5 years