Money is invested into an account earning 4.25% interest compounded annually. If the accumulated value after 18 years will be $25,000, approximately how much money is presently in the account?
a $5,875
b. $11,820
c. $19,125
d. $23,960

  b.  $11,820

Step-by-step explanation:

The 'rule of 72' tells you the doubling time of this account is about ...

  (72 years)/(4.25) = 16.9 years

So, in 18 years, the amount will be slightly more than double the present value. That is, the present value is slightly less than half the future amount.

  $25,000/2 = $12,500

The closest answer choice is ...

  $11,820

__

The present value of that future amount is ...

  PV = FV×(1 +r)^-t = $25,000×1.0425^-18 ≈ $11,818.73

The present value is about $11,820.

80

step-by-step explanation:

might be the correct answer will be question number 2