Question

Simon invests $1300 for 90 days at 2.3%/a compounded monthly. What will Simon's investment be worth after the 90 days?

(a) $1314.50
(b) $1314.75
(c) $1315.00
(d) $1315.25

Answer 1

Simon's investment will be worth approximately (b) $1314.75 after 90 days.

option b. is the answer.

Step-by-step explanation:

To calculate the final amount, we need to use the compound interest formula:

A = P * (1 + r/n)^nt

where:

A is the final amount

P is the principal amount ($1300)

r is the annual interest rate (2.3% or 0.023)

n is the number of compounding periods per year (12 for monthly)

t is the time in years (90 days is 0.25 years)

Plugging in the values:

A = 1300 * (1 + 0.023/12)^12 * 0.25 ≈ 1314.75

Therefore, option (b) is the closest to the calculated value, indicating that Simon's investment will be worth approximately $1314.75 after 90 days.