If you want to earn 11% annual simple interest on an investment, how much should you pay for a note that will be worth $4,200 in 3 months? (Round your answer to two decimal places.)

We are given the following information:

- Future Value (FV) = $4,200
- Annual interest rate (r) = 11% = 0.11
- Time period (t) = 3 months = $\frac{3}{12} = \frac{1}{4} \text{ year}$

To find the present value (PV) or how much you should pay now, we will use the simple interest formula:

\[
FV = PV \times (1 + r \times t)
\]

Rearranging the formula to solve for $ PV $:

\[
PV = \frac{FV}{1 + r \times t}
\]

Now, let's plug in the values and calculate the present value.

\[
PV = \frac{4200}{1 + 0.11 \times \frac{1}{4}}
\] 

\[
PV = \frac{4200}{1 + 0.0275}
\]

\[
PV = \frac{4200}{1.0275}
\] 

Let's calculate this value.The present value, or the amount you should pay now to earn 11% annual simple interest on an investment worth $4,200 in 3 months, is approximately **$4,087.59**.

Would you like any further details or explanations?

Here are 5 related questions you might consider:
1. How would the answer change if the time period were 6 months instead of 3?
2. What if the interest were compounded monthly instead of simple interest?
3. How would you calculate the future value if the present value and interest rate were given?
4. What happens if the interest rate changes after a certain time period?
5. How does simple interest compare with compound interest over longer time periods?

**Tip:** Simple interest is calculated based only on the original principal, while compound interest grows faster since it applies to both the principal and accumulated interest.

If you want to earn 11% annual simple interest on an investment, how much should you pay for a note that will be worth $4,200 in 3 months? (Round your answer to two decimal places.)

Learn how to calculate the present value of an investment that will be worth $4,200 in 3 months, earning 11% annual simple interest. This step-by-step guide uses the simple interest formula to provide a clear solution, ideal for high school students studying algebra and financial math.

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