Calculating Present Value for Future Investment

Alyssa is considering an investment that will yield her $5,000 in 5 years. She wants to know how much she should invest today to achieve this future value if her investment earns an annual interest rate of 6% compounded annually.

To solve this problem, we will use the Present Value (PV) formula, which is given by:

$$PV = rac{FV}{(1 + r)^n}$$

Where:

• $$FV$$ = Future Value
• $$r$$ = annual interest rate
• $$n$$ = number of years