IMO D

rohitgoel15 wrote:

Donald plans to invest x dollars in a savings account that pays interest at an annual rate of 8% compounded quarterly. Approximately what amount is the minimum that Donald will need to invest to earn over $100 in interest within 6 months?

$1500

$1750

$2000

$2500

$3000

The formula for calculating compound interest is A = P(1 + r/n)nt where the variables represent the following:

A = amount of money accumulated after t years (principal + interest)

P = principal investment

r = interest rate (annual)

n = number of times per year interest is compounded

t = number of years

Solution:

r = Rate = 8% compounded quarterly.. = 2% per quarter

t = 6 motnhs = 2 quarters

So A = P (1+0.02)^2

=> A = P * 1.0404

Subsitute, P for 1500, 1700, 2000.. The A-P should be greater than 100 (since Interest = Amount - principal).

For 2500, interest is 101...

Hence, D

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