The question asks to find the Present Value (PV) of an investment that earns 8% per year and is worth $50,000 after 5 years.

To solve this, we use the Present Value formula for compound interest:

$PV = \frac{FV}{(1 + r)^n}$

Where:

• $FV$ is the future value of the investment, which is $50,000.
• $r$ is the annual interest rate, which is 8% or 0.08.
• $n$ is the number of years, which is 5.

Now let's calculate the Present Value:

$PV = \frac{50,000}{(1 + 0.08)^5}$

$PV = \frac{50,000}{(1.08)^5} = \frac{50,000}{1.4693} \approx 34,034.43$

So, the present value of the investment is approximately $34,034.43.

Would you like further details or have any questions?

Here are 5 related questions you might consider:

1. How would the PV change if the interest rate were different?
2. How does the formula change for continuous compounding?
3. What is the future value formula if you know the present value?
4. How does the number of compounding periods affect the present value?
5. Can this concept be applied to inflation adjustments in real-world finances?

Tip: Always check if the interest rate is compounded annually, monthly, or daily when solving PV problems. It impacts the calculation!