A savings account at Xyz Bank offers 4% interest, compounded annually. How much money must I invest today in order for the account to grow t

I have now included the final answer as you requested.

If you still have a problem let me know and I will try to talk you through it :)

$$\\5000=PV(1.04)^{10}\\\\
PV= 5000\div(1.04)^{10}\\\\$$

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WE ALWAYS WANT PEOPLE TO ASK WHEN THEY DO NOT UNDERSTAND. :)

Thank you for asking anon :)

 

I have used the formula 

 

$$FV = PV*(1+i)^n$$

 

where FV is furure value

FV = $5000

PV is present value

PV = ?     This is what we need to find

i is the interest rate per compounding period 

i= 4% = 0.04   and this is yearly

 

n is the number of compounding periods

n =10 because it is 10 years

so

 

$$\\5000=PV(1+0.04)^{10}\\\\
5000=PV*(1.04)^{10}\\\\
$You need to divide both sides by $1.04^{10} $ to get the PV by itself$\\\\
PV= 5000\div(1.04)^{10}\\\\$$

 

$${\frac{{\mathtt{5\,000}}}{{{\mathtt{1.04}}}^{{\mathtt{10}}}}} = {\mathtt{3\,377.820\: \!844\: \!128\: \!994\: \!282\: \!6}}$$

 

you will need to invest $3377.82 

 

Now let me know if you do not understand and try to explain which bit is giving you problems.   :)