Omar has an investment valued at $12,345 today. He made a one-time investment at 6.5% four years ago. Leon has an investment that is also valued at $12,345 today. Leon invested four years
Ago at 7.5%. Omar originally invested _____ and Leon invested _____.
A) $9,568.24; $9,199.16
B) $9,596.05; $9,243.94
C) $9,608.14; $9,267.67
D) $9,633.33; $9,304.06
E) $9,652.18; $9,389.00

Question

Quizplus · Accepted Answer

We can use the formula A = P(1+r/n)^(nt) where A is the final value, P is the initial investment, r is the interest rate, n is the number of times compounded per year, and t is the number of years. We know that both Omar and Leon invested four years ago and their investments are worth $12,345 today. We also know that Omar invested at 6.5% and Leon invested at 7.5%. Let P1 be Omar's initial investment and P2 be Leon's initial investment. Then we have:

$12,345 = P1(1+0.065/1)^(1*4)
$12,345 = P2(1+0.075/1)^(1*4)

Simplifying these equations, we get:

P1 = $9,596.05
P2 = $9,243.94

Therefore, the answer is B.

Omar Has an Investment Valued at $12,345 Today