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Manager
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An investment of d dollars at K percent simple annual [#permalink]
 07 Aug 2007, 22:17
An investment of d dollars at K percent simple annual interest yields $600 interest over a two year period. In terms of d, what dollar amt invested at the same rate will yield $ 2400 interest over a 3 year period.
A) 2d/3 B) 3d/4 C) 4d/3 D) 3d/2 E) 8d/3
pls explain y oa is E.
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GMAT Club Legend
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I = principal * rate * time
600 = d * k/100 * 2
300/d = k/100
2400 = principal * k/100 * 3
800 = principal * 300/d
principal = 8d/3
GMAT seldoms tests interest calculation. But it doesn't hurt to know the simple interest and compound interest formula.
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Director
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another way to do it would be:
interest on D = $300/year (600/2 = 300)
you want $2,400 over 3 years
2400/3 = 800/year in interest
800/300 = 8/3D or answer E
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Manager
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in this case it is easier to plug in
make d=6000 k=5% and u'll have 600 for 2 years
so if you make d=16000 u got 2400 for 3 years
thus,
16000/6000 = 8/3d
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Director
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that still seems longer than looking at it like this:
you make $300/year at this level. You need to make $800/year at this new level. What do you multiply D by to get from 3 to 8? 8/3!
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