Please help with the following questions. 43) Suzie Mack must pay a lum sum of $

Question

Please help with the following questions. 43) Suzie Mack must pay a lum sum of $6000 in 5years. What amount deposited today at 4% compounded annuallywillg row to $6000 in 5 years. I started off by using: P=6000, t=5, r=4%, m=1 and n= 5*1 =5. Not sure how to set this up correctly. Please help with the following questions. 43) Suzie Mack must pay a lum sum of $6000 in 5years. What amount deposited today at 4% compounded annuallywillg row to $6000 in 5 years. I started off by using: P=6000, t=5, r=4%, m=1 and n= 5*1 =5. Not sure how to set this up correctly.

Explanation / Answer

M is the future value=$6000 P is original investment and is our unknown i=4% t=5 :
M=P(1+i)t :
6000=P(1.04)5 :
6000=P(1.04)5 :
6000=P(1.2166529) :
P=6000/1.2166529=$4931.56

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