Answer
The present value $P$ that must be invested is $\$7207.21$
Work Step by Step
This is the formula we use when we make calculations with simple interest:
$A = P~(1+rt)$
$A$ is the future value
$P$ is the present value
$r$ is the interest rate
$t$ is the number of years
We can find the present value $P$ that must be invested.
$A = P~(1+rt)$
$P = \frac{A}{1+rt}$
$P = \frac{\$8000}{1+(0.055)(2)}$
$P = \$7207.21$
The present value $P$ that must be invested is $\$7207.21$
