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10,000 is deposited in a certain account that pays r percent

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Intern
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Joined: 19 Aug 2007
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10,000 is deposited in a certain account that pays r percent [#permalink] New post 17 Sep 2007, 02:11
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100% (01:12) correct 0% (00:00) wrong based on 1 sessions
$10,000 is deposited in a certain account that pays r percent annual interest compounded annually, the amount D(t), in dollars, that the deposit will grow to in t years is given by D(t) = 10,000 {1+(r/100)}^t. What amount will the deposit grow to in 3 years?

(1) D(t) = 11,000
(2) r =10

I do not understand what condtion (1) means. OA is "D", by the way. Thank you for helping me!
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Re: DS compound interest [#permalink] New post 17 Sep 2007, 10:13
minnu wrote:
$10,000 is deposited in a certain account that pays r percent annual interest compounded annually, the amount D(t), in dollars, that the deposit will grow to in t years is given by D(t) = 10,000 {1+(r/100)}^t. What amount will the deposit grow to in 3 years?

(1) D(t) = 11,000
(2) r =10

I do not understand what condtion (1) means. OA is "D", by the way. Thank you for helping me!


statm 1 tells us in t years you will get 11000.
set up the equation:
11000=10,000 {1+(r/100)}^t

you have two unknowns in this eq. t and r, the question stem tell you that t=3 years, so now you onlyhave one unknown r, which can be solve from the equation above. therefore, statm 1 is sufficient.

statm 2 tells you r.

you can plug this into the equation D(t) given t=3. sufficient.

therefore, the answer is D. Each alone is sufficient.
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Re: DS compound interest [#permalink] New post 17 Sep 2007, 12:12
minnu wrote:
$10,000 is deposited in a certain account that pays r percent annual interest compounded annually, the amount D(t), in dollars, that the deposit will grow to in t years is given by D(t) = 10,000 {1+(r/100)}^t. What amount will the deposit grow to in 3 years?

(1) D(t) = 11,000
(2) r =10

I do not understand what condtion (1) means. OA is "D", by the way. Thank you for helping me!



Ya this is D. Even u don't understand interest problems (rarely see them on the GMAT), you can simply see that you have an equation with 2 unknowns.

t=3 so you can put that into the equation.

S1: gives you D(t)=11,000 so you can find r.

S2: gives you r so you can find D.

Both are suff.

No need to do all the calculations
Re: DS compound interest   [#permalink] 17 Sep 2007, 12:12
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