What amount of money would have to be invested at 3.75% to grow to $10 000 after 91 days?
A) $10 375
B) $2586
C) $9639
D) $9907
E) $10 000

Question

Quizplus · Accepted Answer

We can use the formula:

A = P(1 + rt)

where A is the amount after time t, P is the principal (initial amount), r is the interest rate (as a decimal), and t is the time (in years).

Since we have 91 days, which is about 0.2493 years (91/365), we can plug in the values we know:

$10 000 = P(1 + 0.0375*0.2493)

Simplifying, we get:

$10 000 = P(1.0093)

Dividing both sides by 1.0093, we get:

P ≈ $9907

Therefore, the best choice is D, $9907.

What Amount of Money Would Have to Be Invested at 3.75