Iris has an investment worth $8,813. she made her only deposit in it seven years ago. given that the investment yields 3.7% simple interest annually, how big was the initial deposit? a. $1,806 b. $2,282 c. $4,095 d. $7,000

d. $7,000

Explanation:

To find the answer, you need to apply the Present Value (PV) formula to simple interest.

PV = FV / (1 + i * n)

Where:

PV = present value

PV = future value

i = annual interest rate

n = number of years

We know how much Iris has after eight years, meaning future value is $ 8,813

We know the interest rate: i = 3.7% per year , witch is 3,7/100 = 0.037

We know the number of years: n = 7

We need to find out the present value (PV) which is the amount Iris deposited 7 years ago.

Simply apply the values to the formula:

PV = 8.813 / (1 + 0.037 * 7)

PV = 8.813 / 1.259

PV = 7000

Therefore, Iris's initial deposit was $ 7000

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