Answer:
$500
Explanation:
The expression that describes the present net worth of an investment (P) given its future value (FV) at an annual rate (r) for a period of n years, compounded annually is:
[tex]P=\frac{FV}{(1+r)^n}[/tex]
If the future value of an investment is $1,095.50 after 20 years at a rate of 4% per year, the present value (P) is:
[tex]P=\frac{1,095.50}{(1+0.04)^{20}}\\P= \$499.97[/tex]
The present worth of this investment is roughly $500.
