find the present value of an investment that is worth $19,513.75 after earning 3percent simple interest for 5.5 years

The simple interest formula allows us to calculate A, which is the final amount. According to this formula, the amount is given by A = P (1 + r*t), where P is the principal, r is the annual interest rate in decimal form, and t is the loan period expressed in years

simple interest formula:

t: time

P: present value

A: amount

r : anual interest

A = P (1 + r*t)

P = A / (1 + r*t)

P = 19,513.75 / (1 + 3/100 * 5.5)

P = 19,513.75/ (1 + 0.165)

P = 19,513.75 / 1.165

P = 16750

present value = $16750

raphealnwobi raphealnwobi · Answer 2 · 2021-10-15T12:22:38+02:00

The present value of the investment is $16750 after 5.5 years

Let A represent the value of the investment after 5.5 years, P represent the present value of the investment, I represent the interest, R represent the interest rate, T represent the time taken.

Given that A = $19513.75, R = 3% = 0.03, T = 5.5 years.

[tex]I=PRT\\\\I=P*0.03*5.5\\\\I=0.165P[/tex]

[tex]A=I+P\\\\A=0.165P+P\\\\A=1.165P\\\\19513.75=1.165P\\\\P=\$16750[/tex]

Therefore the present value of the investment is $16750