If $20,000 was invested 82 days ago at an interest rate of 13.75%, what would be the value of the investment today?
A) $19,401
B) $20,618
C) $22,750
D) $20,000
E) $26,306

Question

Quizplus · Accepted Answer

The value of the investment today can be calculated using the formula for simple interest: $A = P(1 + rt)$, where $A$ is the amount of money accumulated after n days, including interest, $P$ is the principal amount ($20,000), $r$ is the annual interest rate (13.75% or 0.1375 as a decimal), and $t$ is the time the money is invested for in years. Since the investment is for 82 days, we convert this to years by dividing by 365 (82/365 ≈ 0.2247 years). Plugging the values into the formula gives us: $A = 20000(1 + 0.1375 \times 0.2247) ≈ \$20,618$.

If $20,000 Was Invested 82 Days Ago at an Interest