Ramon's goal is to have 5000 after 4 years Is this possible if he invest with a rate of return of 6 Explain?

To determine if Ramon can reach his goal of $5,000 in 4 years with a 6% annual rate of return, we can use the formula for compound interest: ( A = P(1 + r)^t ). Rearranging the formula to find the principal ( P ), we have ( P = \frac{A}{(1 + r)^t} ). Plugging in the values: ( P = \frac{5000}{(1 + 0.06)^4} ), which calculates to approximately $3,964. If Ramon invests around $3,964 today, he will reach his goal of $5,000 in 4 years at a 6% return.