Answer:
$49,394.66
Step-by-step explanation:
Use the compound amount formula:
A = P(1 + r)^t
Here A = $65,000; t = 7 years; and r = 0.04.
We want P, given A, r and t.
$65,000
P = ------------------- = $49,394.66
(1 + 0.04)^7
$49,394.66 will increase to $65,000 in 7 years with an interest rate of 4% compounded annually.
