$2700 left in an account paying 4% interest would be worth how much today?
Scott, you are not giving us anything like the information required for this problem or the other one.
Compound interest?
How often? (monthly, continuous, quarterly)
How long?
In your earlier problem you gave us no idea what the interest rate was or how often it was compounded. Are you making these problems up yourself?
It is not a school question. It is a real life question.
So let's assume the interest averaged 4 % compounded daily over the 27 years.
future value = present value e^yr
where y = 27 years
r = .04 yearly interest rate
e^1.08 = 2.945
so
2700 * 2.945 = 7950.63
calculator here:
http://www.moneychimp.com/articles/finworks/continuous_compounding.htm
To calculate how much the $2700 in an account would be worth today with a 4% interest rate, we need to use the formula for compound interest.
The formula is: A = P(1 + r/n)^(nt)
Where:
A is the final amount (the value today)
P is the principal amount (the initial amount)
r is the annual interest rate (expressed as a decimal)
n is the number of times interest is compounded per year
t is the number of years
In this case, the principal amount (P) is $2700, the annual interest rate (r) is 4% (0.04 as a decimal), the number of times interest is compounded per year (n) is usually not provided, and we'll assume it to be compounding annually, and the number of years (t) is the number of years since the money was placed in the account.
Assuming the money has been in the account for one year (t = 1), we can plug in the values into the formula:
A = 2700(1 + 0.04/1)^(1*1)
A = 2700(1 + 0.04)^1
A = 2700(1.04)
Calculating the expression in parentheses:
A = 2700 * 1.04
A = 2808
Thus, after one year, the account balance would be $2808.
If you want to know the value after a different number of years, simply substitute the desired value of t into the formula.