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An investment of d dollars at K percent simple annual

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Manager
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An investment of d dollars at K percent simple annual [#permalink] New post 07 Aug 2007, 21:17
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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 [#permalink] New post 08 Aug 2007, 00:02
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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 [#permalink] New post 08 Aug 2007, 03:10
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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 [#permalink] New post 08 Aug 2007, 05:06
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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 [#permalink] New post 08 Aug 2007, 05:20
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!
  [#permalink] 08 Aug 2007, 05:20
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