Determine the present value P that must be invested to have the future value A at simple interest rate r after time t.
A = $4500, r = 4.5%, t = 6 years
To find the present value P, we can use the formula for simple interest:
A = P(1 + rt)
Plugging in the values:
4500 = P(1 + 0.045*6)
4500 = P(1 + 0.27)
4500 = P(1.27)
Now, solve for P:
P = 4500 / 1.27
P = $3543.31
Therefore, the present value P that must be invested to have a future value of $4500 at a simple interest rate of 4.5% after 6 years is $3543.31.