1. The problem asks to find the original principal amount invested given the future value after 5 years with 7% annual compounding. 2. The formula for compound interest is $$A = P(1 + r)^t$$ where: - $A$ is the future value - $P$ is the principal amount - $r$ is the annual interest rate (decimal) - $t$ is the time in years 3. We know $A = 42045.18$, $r = 0.07$, and $t = 5$. We need to find $P$. 4. Rearranging the formula to solve for $P$: $$P = \frac{A}{(1 + r)^t}$$ 5. Calculate the denominator: $$ (1 + 0.07)^5 = 1.07^5 $$ 6. Calculate $1.07^5$: $$1.07^5 = 1.402551$$ (rounded to 6 decimal places) 7. Now calculate $P$: $$P = \frac{42045.18}{1.402551} = 29985.00$$ (rounded to two decimal places) 8. Therefore, the original principal amount invested was 29985.00.