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An investment of d dollars at k percent simple annual [#permalink]
10 Dec 2010, 10:16

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E

Difficulty:

35% (medium)

Question Stats:

73% (02:29) correct
27% (01:43) wrong based on 277 sessions

An investment of d dollars at k percent simple annual interest yields $600 over a 2 year period. In terms of d, what dollar amount invested at the same rate will yield $2,400 over a 3 year period?

Re: Another simple one i guess... [#permalink]
10 Dec 2010, 10:34

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Expert's post

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An investment of d dollars at k percent simple annual interest yields $600 over a 2 year period. In terms of d, what dollar amount invested at the same rate will yield $2,4,00 over a 3 year period? A. (2d)/3 B. (3d)/4 C. (4d)/3 D. (3d)/2 E. (8d)/3

Simple interest = principal * interest rate * time, where "principal" is the starting amount and "rate" is the interest rate at which the money grows per a given period of time (note: express the rate as a decimal in the formula). Time must be expressed in the same units used for time in the Rate.

An investment of d dollars at k percent simple annual interest yields $600 over a 2 year period --> \(d*\frac{k}{100}*2=600\) --> \(k=\frac{30,000}{d}\)

What (x) dollar amount invested at the same rate will yield $2,400 over a 3 year period --> \(x*\frac{k}{100}*3=2,400\) --> \(x*\frac{30,000}{100d}*3=2,400\) --> \(x=\frac{8d}{3}\).

Answer: E.

Or another way: In order interest to be 4 times more in 1.5 times longer time period then investment must be 4d/1.5=8d/3.

Re: an investment of d dollars at k percent [#permalink]
18 Jun 2011, 06:58

1

This post received KUDOS

WishMasterUA wrote:

an investment of d dollars at k percent simple annual interest yield $600 interest over a 2-year period. in term of d, what dollar amount invested at the same rate will yild $2400 interest income over a 3-year period? 1) 2d/3 2) 3d/4 3) 4d/3 4) 3d/2 5) 8d/3

Please explain in detail how to solve this problem.

Re: An investment of d dollars at k percent simple annual [#permalink]
13 Jul 2014, 18:19

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Re: An investment of d dollars at k percent simple annual [#permalink]
09 Feb 2015, 11:27

Hi Bunuel,

If we take simple annual interest of 2% for $10,000 investment, for 2 years it will amount to $404.

How do we know "An investment of d dollars at k percent simple annual interest yields $600 over a 2 year period" = d*k/100 *2 and not similar to $404 calc?

Re: An investment of d dollars at k percent simple annual [#permalink]
09 Feb 2015, 12:22

1

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Expert's post

Hi nitestr,

The GMAT will likely ask you to deal with an "interest formula" question once or twice, so you need to note the wording of the prompt and you need to know the formulas for simple interest and compound interest.

Simple Interest = (Principal)(1 + RT)

Compound Interest = (Principal)(1 + R)^T

R = interest rate written as a decimal T = length of time (usually years)

So, if we calculate 2% simple interest on a $10,000 principal over 2 years, we'll have...

Re: An investment of d dollars at k percent simple annual [#permalink]
25 May 2015, 10:54

1

This post received KUDOS

EMPOWERgmatRichC wrote:

Hi nitestr,

The GMAT will likely ask you to deal with an "interest formula" question once or twice, so you need to note the wording of the prompt and you need to know the formulas for simple interest and compound interest.

Simple Interest = (Principal)(1 + RT)

Compound Interest = (Principal)(1 + R)^T

R = interest rate written as a decimal T = length of time (usually years)

So, if we calculate 2% simple interest on a $10,000 principal over 2 years, we'll have...

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