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A $2500 investment that costs 75% of its value pays a monthly interest rate of 4%. What is the original cost of the investment?

A. $2,000
B. $2,500
C. $3,000
D. $4,000

1 Answer

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Final answer:

To find the original cost of an investment that has lost 75% of its value and is now worth $2500, we divide the current value by 0.25, resulting in $10,000. However, this correct calculation does not match the provided answer options, indicating a potential error in the question.

Step-by-step explanation:

To determine the original cost of a $2500 investment that loses 75% of its value, we should look at what 75% loss means in terms of the original price. If the investment loses 75%, this implies the current value, $2500, represents the remaining 25% of the original value. Thus, to find the original cost, we divide the current value by 0.25 (which is the same as 25%).

Original Cost = $2500 / 0.25 = $10,000.

However, this answer is not in the answer options provided. It's likely that there is an error in the original question, as none of the available answers (A. $2,000 B. $2,500 C. $3,000 D. $4,000) correspond to the calculated original cost.

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