Find all School-related info fast with the new School-Specific MBA Forum

It is currently 05 Feb 2016, 23:42
GMAT Club Tests

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

A certain investment grows at an annual interest rate of 8%,

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
Director
Director
avatar
Joined: 10 Feb 2006
Posts: 657
Followers: 3

Kudos [?]: 251 [0], given: 0

A certain investment grows at an annual interest rate of 8%, [#permalink] New post 22 Nov 2007, 18:33
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

A certain investment grows at an annual interest rate of 8%, compounded quarterly. Which of the following equations can be solved to find the number of years, x, that it would take for the investment to increase by a factor of 16?

16 = (1.02) ^ x/4
2 = (1.02) ^ x
16 = (1.08) ^ 4x
2 = (1.02) ^x/4
1/16 = (1.02) 4x

We know compound quarterly formula = A = p(1 + r/4) ^4

What do they mean by factor of 16 ?
_________________

GMAT the final frontie!!!.

Senior Manager
Senior Manager
avatar
Joined: 06 Aug 2007
Posts: 368
Followers: 1

Kudos [?]: 27 [0], given: 0

Re: Compounded Quarterly - MGMT [#permalink] New post 22 Nov 2007, 18:46
alimad wrote:
A certain investment grows at an annual interest rate of 8%, compounded quarterly. Which of the following equations can be solved to find the number of years, x, that it would take for the investment to increase by a factor of 16?

16 = (1.02) ^ x/4
2 = (1.02) ^ x
16 = (1.08) ^ 4x
2 = (1.02) ^x/4
1/16 = (1.02) 4x

We know compound quarterly formula = A = p(1 + r/4) ^4

What do they mean by factor of 16 ?


Is the answer B: 2 = (1.02) ^ x

I think it means A/P = 16....it means the principal becomes 16 times.....
Director
Director
avatar
Joined: 10 Feb 2006
Posts: 657
Followers: 3

Kudos [?]: 251 [0], given: 0

 [#permalink] New post 22 Nov 2007, 18:51
spider : How did you get this :

Is the answer B: 2 = (1.02) ^ x

16 = (1.02) ^x/4
2^4 = (1.02) ^x/4

Is this right..
_________________

GMAT the final frontie!!!.

Senior Manager
Senior Manager
avatar
Joined: 06 Aug 2007
Posts: 368
Followers: 1

Kudos [?]: 27 [0], given: 0

 [#permalink] New post 22 Nov 2007, 19:24
alimad wrote:
spider : How did you get this :

Is the answer B: 2 = (1.02) ^ x

16 = (1.02) ^x/4
2^4 = (1.02) ^x/4

Is this right..

Alimad

16 = (1 + 2/100)^4x

2^4 = (1.02)^4x

so 4 = 4x or x = 1

Hence 2 = (1.02)^x
Director
Director
avatar
Joined: 10 Feb 2006
Posts: 657
Followers: 3

Kudos [?]: 251 [0], given: 0

 [#permalink] New post 22 Nov 2007, 19:28
hmm, but we have both of them in the answer choice. let me find the answer. Thanks spider.
_________________

GMAT the final frontie!!!.

  [#permalink] 22 Nov 2007, 19:28
Display posts from previous: Sort by

A certain investment grows at an annual interest rate of 8%,

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.