Answer: $4,274.02
Step-by-step explanation:
Given: The amount Todd has currently (P) = $5,000
The rate of interest (r) = 4%=0.04
Let the amount of money he has four years ago be x.
The formula to calculate compound amount after x years is given by :-
\(A=P(1+r)^x\\\\\Rightarrow\$5,000=P(1+0.04)^4\\\\\Rightarrow\$5,000=P(1.04)^4\\\\\Rightarrow\$5,000=P(1.16985856)\\\\\Rightarrow P=\frac{\$5,000}{1.16985856}=\$4274.02095515\approx\$4,274.02\)
Hence, the amount of money he has four years ago = $4,274.02
