A financial instrument pays 8% simple interest (based on the purchase value) and lasts for 3 years. The instrument can be purchased at any price. An investor purchases the instrument for P0, and has calculated that the total value of the investment (i. e. P0 plus interest earned) will be $2,000 at maturity. Calculate P0, giving your answer to the nearest cent.
Give your answer in dollars and cents to the nearest cent. Do not include commas or the dollar sign in your answer. For example, the solution $1,234.56 would be written as 1234.56.

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step-by-step explanation:

answer: c, the green line

step-by-step explanation:

there is no black line, eliminate b.

simple interest implies periodic payments, but the red line shows no payments, eliminate d.

simple interest has equal payments. if paid say every day, the graph is about a straight line (actually a stairstep).

the yellow line is not straight, eliminate a.

check: the green line is straight, answer is c.

simple interest with positive interest rate gives a straight line sloping up to the right. green line:

g(t) = $100 + ($200-$100) ÷ (20 years) × (t years)

= $100 + (4%/year) × ($100)(t years)

incidentally, the yellow line curving upward represents continuously compounded interest

y = $100 × 2^(t years / (14 assuming the yellow line hits $200 at 14 years. 2^0 is 1, so y(0) = $100; 2^(14/14) is 2, so y(14) = $200.

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step-by-step explanation: