Pierce currently has $10,000. What was the value of his money five years ago if he has earned 5 percent interest each year?. . . A.. . $7,462.15. . . . . B.. $7,835.26. . . . . C.. $8,548.04.
Amount = $10000 Let us assume the principal = x Amount of interest = 5% Time = 5 years Then x (1 + i)^t = 10000 x(1 + 0.05)^5 = 10000 x(1.05)^5 = 10000 1.28x = 10000 x = 10000/1.276281 = 7835.26 From the above deduction, it can be easily concluded that the correct option among all the options that are given in the question is the second option or option "B".
