Answer
$P \approx \$10,158.73$
Work Step by Step
RECALL:
The formula for the future value $A$ is:
$A=P(1+rt)$
where
P = principal amount borrowed
r = interest rate per year
t = time in years
Divide $(1+rt)$ on both sides of the formula given above to obtain:
$\dfrac{A}{1+rt}=P$
Thus, the principal or present value $P$ can be found using the formula above.
Use the formula above and the given values in the problem to obtain:
$P=\dfrac{\$16000}{1+11.5\% \cdot 5}
\\P=\dfrac{\$16000}{1+0.115 \cdot 5}
\\P=\dfrac{\$16000}{1+0.575}
\\P=\dfrac{\$16000}{1.575}
\\P=\$10,158.73016
\\P \approx \$10,158.73$
