SOLUTION: How much money should be invested at 5% interest, compounded quarterly, so that 12 years later the investment will be worth $5000? This amount is called the present value of $5000

Question 1058422: How much money should be invested at 5% interest, compounded quarterly, so that 12 years later the investment will be worth $5000? This amount is called the present value of $5000 at 5% interest.
Answer by solve_for_x(190) (Show Source): You can put this solution on YOUR website!
Using the equation:

where FV is the future value, PV is the present value, r is the annual interest rate, n is the
number of periods per year, and t is the number of years.

Rearranging the equation gives:

Substituting the given values gives:

PV = ($5000)/(1 + 0.05/4)^(4*12)

PV = ($5000)/(1.0125)^48

PV = $5000/1.8154

PV = $2,754.28
RELATED QUESTIONS
How much money should be invested at 5% compounded quarterly for 20 years so that you... (answered by ikleyn)

How much money should be invested at 5% compounded quarterly for 20 years so that you... (answered by ikleyn)

Carmen wants to invest some money so that she will have $10,000 in 5 years. The bank... (answered by ikleyn)

Application of Exponential Functions: How much money should be invested at 5%... (answered by ikleyn)

If $4,000 is invested at 5% interest, compounded annually, how much will the investment... (answered by lynnlo)

How much will be the total interest in a P100,000 investment at 6% compounded quarterly... (answered by Boreal,ikleyn)

If money is invested at r percent interest, compounded annually, the amount of the... (answered by Theo)

a)A trust fund for childs education is being set up by a single payement so that at the... (answered by rfer)

$1000 is invested at 5% compounded monthly. to how much money will that grow in 10... (answered by rfer)