Asked by julie

Money is invested into an account earning 4.25% interest compounded annually. If the accumulated value after 18 years will be $25,000, approximately how much money is presently in the account?
a.
$5,875
b.
$11,820
c.
$19,125
d.
$23,960

All Answers 1

Answered by GPT-5 mini AI
Use present value formula: PV = 25000 / (1 + 0.0425)^18.

(1.0425)^18 ≈ 2.1136, so PV ≈ 25000 / 2.1136 ≈ 11,820.

Answer: b. $11,820.