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

It is currently 02 Jul 2015, 16:15

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

All, I am trying to understand the explanation for couple of

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Intern
Intern
avatar
Joined: 16 May 2003
Posts: 1
Followers: 0

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

All, I am trying to understand the explanation for couple of [#permalink] New post 19 Jul 2003, 15:29
All,
I am trying to understand the explanation for couple of questions in the "The official guide for GMAT review", 10thedition.

Question 125) If $1 were invested at 8% interest compounded annually, the total value of the investment, at the end of 6years would be?

The answer says (1)(1.08)power6 = 1.08 to the power 6

Question 136)
0.05*10 to the power m-k = 5*10 to the power -2 *10 to the power m-k

I thought this should be 5*10 to the power 2 *10 to the power m-k (and not -2)

Sorry if it is a no brainer!
Appreciate your response.
Kaplan GMAT Prep Discount CodesKnewton GMAT Discount CodesManhattan GMAT Discount Codes
GMAT Instructor
User avatar
Joined: 07 Jul 2003
Posts: 770
Location: New York NY 10024
Schools: Haas, MFE; Anderson, MBA; USC, MSEE
Followers: 13

Kudos [?]: 69 [0], given: 0

Re: Explanation for GMAT review guide [#permalink] New post 19 Jul 2003, 18:17
apandian wrote:
All,
I am trying to understand the explanation for couple of questions in the "The official guide for GMAT review", 10thedition.

Question 125) If $1 were invested at 8% interest compounded annually, the total value of the investment, at the end of 6years would be?

The answer says (1)(1.08)power6 = 1.08 to the power 6

Question 136)
0.05*10 to the power m-k = 5*10 to the power -2 *10 to the power m-k

I thought this should be 5*10 to the power 2 *10 to the power m-k (and not -2)

Sorry if it is a no brainer!
Appreciate your response.


#125)

This is how compound interest works. Here is a general example. Let's say you start off with X dollar and the interest rate is i%. After the first year, your have (X)(1 + i) dollars right? At the end of the second year, you get somemore interest, but the interest is applied to the new dollar amount that you have. So now at the end of 2 years, you have ((X)(1 + i)) times (1 +i ) or (X)(1+i)^2. At the end of 3 years, you have ((X)(1 + i)^2 )(1 + i) or (X)(1+i)^3. So you see, if you start with X dollars and you get interest of i% compounded annually, you will have (X)(1 + i)^N dollars at the end of N years.
_________________

Best,

AkamaiBrah
Former Senior Instructor, Manhattan GMAT and VeritasPrep
Vice President, Midtown NYC Investment Bank, Structured Finance IT
MFE, Haas School of Business, UC Berkeley, Class of 2005
MBA, Anderson School of Management, UCLA, Class of 1993

Intern
Intern
avatar
Joined: 07 May 2003
Posts: 7
Followers: 0

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

Re: Explanation for GMAT review guide [#permalink] New post 23 Jul 2003, 13:23
0.05=5*10^-2, right? Hence the negative sign.
Senior Manager
Senior Manager
avatar
Joined: 29 Jan 2011
Posts: 378
Followers: 0

Kudos [?]: 75 [0], given: 87

Re: Explanation for GMAT review guide [#permalink] New post 01 Nov 2011, 23:50
Can someone please explin how to solve this ?
The complete question is :

If $1 were invested at 8 percent interest compounded annually, the total value of investement, in dollars at the end of 6 years would be
A) 1.8^6
B)1.08^6
C)6(1.08)
D)1+ 0.08^6
E)1+6(0.08)
Re: Explanation for GMAT review guide   [#permalink] 01 Nov 2011, 23:50
    Similar topics Author Replies Last post
Similar
Topics:
I am having a rough time understanding this equation (see noah 2 21 Jul 2007, 15:45
I am trying to learn some business stats before I go into an jamesrwright3 2 30 Dec 2006, 22:23
I am trying to find a good material for probability, lan583 1 25 Jul 2006, 06:07
looking for an alternative approach basically i am trying to mand-y 7 31 May 2006, 14:23
I am trying to get 95+ percentile in Math. I believe the sukhwi 0 24 Dec 2005, 12:38
Display posts from previous: Sort by

All, I am trying to understand the explanation for couple of

  Question banks Downloads My Bookmarks Reviews Important topics  


cron

GMAT Club MBA Forum Home| About| Privacy Policy| 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®.