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Mary's bank account earns 4% simple interest per year. How much must she deposit in the account today if she wants it to be worth $1,000 in 5 years? Round your answer to the nearest dollar. Do NOT round until you have calculated your final answer.

Respuesta :

Answer:

For this, we can use the formula

A=P(1+rt).

We know that A=1,000, r=4%=0.04 and t=5, so we can rearrange the formula for P to give

P=A1+rt,

and substituting the known quantities gives

P=1,0001+(0.04)(5)=1,0001.2≈$833.33

to the nearest cent. So, to the nearest dollar she must deposit $833.

Step-by-step explanation: