A deposit of $25,000 is made on February 28^th,2007.Given a simple discount rate of d = 8%,what is the accumulated value of the $25,000 on May 18^th,2007,assuming the bankers rule for t? A)$25,446.73 B)$25,440.50 C)$25,438.89 D)$25,432.88

Question

Quizplus · Accepted Answer

First, we need to find the time between February 28th, 2007 and May 18th, 2007 using the banker's rule:
t = [(31 - 28) + 31 + 18]/360 = 72/360 = 0.2 years

Next, we can use the simple discount formula to find the accumulated value:
Accumulated value = Principal * (1 - d * t)
Accumulated value = $25,000 * (1 - 0.08 * 0.2)
Accumulated value = $25,000 * 0.984
Accumulated value = $25,446.73

Therefore, the best choice is A) $25,446.73, as it is the only one that matches our calculation.

A Deposit of $25,000 Is Made on February 28th,2007

A Deposit of $25,000 Is Made on February 28^th,2007