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.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

A certain investment grows at an annual interest rate of 8%, [#permalink]

Show Tags

18 Nov 2009, 20:41

13

This post was BOOKMARKED

00:00

A

B

C

D

E

Difficulty:

95% (hard)

Question Stats:

42% (02:04) correct
58% (00:56) wrong based on 407 sessions

HideShow timer Statistics

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?

A. 16 = 1.02^(x/4) B. 2 = 1.02^x C. 16 = 1.08^(4x) D. 2 = 1.02^(x/4) E. 1/16 = 1.02^(4x)

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?[/b]

I am confused by the wording here:

It is implied in the OA that "increase by a factor of 16" means that the Amount increased to 16 times its original amount.

Don't you think that "increase by a factor of 16" means [b]x + 16x?

Hope an expert clarifies this doubt!

Increasing something by a factor of x means multiplying by x.
_________________

Re: A certain investment grows at an annual interest rate of 8%, [#permalink]

Show Tags

18 Nov 2009, 22:52

kairoshan 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

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

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

If we apply 8% annual interest, compounded quarterly, then we apply one quarter of the interest (or 2% interest) four times per year. That is, in one year, we will multiply the value of our investment by 1.02 four times, or in other words, by (1.02)^4. So, if we invest for x years, we will apply 2% interest 4x times, so will multiply the value of our initial investment by (1.02)^(4x). Now, we know that the value has increased by a factor of 16, so

If you are looking for online GMAT math tutoring, or if you are interested in buying my advanced Quant books and problem sets, please contact me at ianstewartgmat at gmail.com

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

If we apply 8% annual interest, compounded quarterly, then we apply one quarter of the interest (or 2% interest) four times per year. That is, in one year, we will multiply the value of our investment by 1.02 four times, or in other words, by (1.02)^4. So, if we invest for x years, we will apply 2% interest 4x times, so will multiply the value of our initial investment by (1.02)^(4x). Now, we know that the value has increased by a factor of 16, so

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

Thanks, i was confused with 8% annual rate. If the question was like 8% interest rate means we will take 1.08 only rgt?

Re: A certain investment grows at an annual interest rate of 8%, [#permalink]

Show Tags

13 Nov 2013, 10:33

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

Re: A certain investment grows at an annual interest rate of 8%, [#permalink]

Show Tags

03 Aug 2014, 04:39

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?[/b]

I am confused by the wording here:

It is implied in the OA that "increase by a factor of 16" means that the Amount increased to 16 times its original amount.

Don't you think that "increase by a factor of 16" means [b]x + 16x?

Re: A certain investment grows at an annual interest rate of 8%, [#permalink]

Show Tags

23 May 2016, 04:59

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

Re: A certain investment grows at an annual interest rate of 8%, [#permalink]

Show Tags

02 Sep 2016, 13:41

IanStewart wrote:

ssruthi 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

If we apply 8% annual interest, compounded quarterly, then we apply one quarter of the interest (or 2% interest) four times per year. That is, in one year, we will multiply the value of our investment by 1.02 four times, or in other words, by (1.02)^4. So, if we invest for x years, we will apply 2% interest 4x times, so will multiply the value of our initial investment by (1.02)^(4x). Now, we know that the value has increased by a factor of 16, so

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

Could you please elaborate on the yellow part?

Thanks!

gmatclubot

Re: A certain investment grows at an annual interest rate of 8%,
[#permalink]
02 Sep 2016, 13:41

It’s quickly approaching two years since I last wrote anything on this blog. A lot has happened since then. When I last posted, I had just gotten back from...

Since my last post, I’ve got the interview decisions for the other two business schools I applied to: Denied by Wharton and Invited to Interview with Stanford. It all...