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# An investor purchased a bond for p dollars on Monday. For a

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Manager
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An investor purchased a bond for p dollars on Monday. For a [#permalink]

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05 Aug 2006, 12:33
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An investor purchased a bond for p dollars on Monday. For a certain number of days, the value of the bond increased by r percent per day. After this period of constant increase, the bond decreased the next day by q dollars and the investor decided to sell the bond that day for v dollars. When did the investor sell the bond if: See attached file.

A Wednesday of the same week.
B Thursday of the same week.
C Friday of the same week.
D Monday of the next week.
E Tuesday of the next week

had to guess on this one... and missed it by one day...
I was not sure how to approach this problem... I hope that something like this does not show up on the real GMAT...
Attachments

Interest.doc [23.5 KiB]

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05 Aug 2006, 13:04
acfuture wrote:
An investor purchased a bond for p dollars on Monday. For a certain number of days, the value of the bond increased by r percent per day. After this period of constant increase, the bond decreased the next day by q dollars and the investor decided to sell the bond that day for v dollars. When did the investor sell the bond if: See attached file.

A Wednesday of the same week.
B Thursday of the same week.
C Friday of the same week.
D Monday of the next week.
E Tuesday of the next week

had to guess on this one... and missed it by one day...
I was not sure how to approach this problem... I hope that something like this does not show up on the real GMAT...

p(1+r/100)^n -q = v
p(1+sqrt((v+q)/p)-1)^n-q =v
[sqrt((v+q)/p)]^n = (v+q)/p
let (v+q)/p = a
[sqrt(a)]^n = a
Thus n=2 (2days of increases + 1 day of decrease)
Monday+3 = Thursday..
B it is.
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05 Aug 2006, 13:17
this is a little bit tricky question I finish it to the answer n=2
and forget to add 1 for day of decreasing
so I answer A which is wrong the real answer is B

Anyway , you will not find this kind of question in real test
from my observation that PS in real test will be easier than this
the real core of GMAT Q will be on DS
I always finish every PS in 0.5-1 min but have to spend rest of the time
for DS and I met about 22-24 DS from 37 all questions
so be prepared for DS and be very cautious in "seem to be easy question"
in DS that's all I would say
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05 Aug 2006, 20:28
freetheking wrote:
acfuture wrote:
An investor purchased a bond for p dollars on Monday. For a certain number of days, the value of the bond increased by r percent per day. After this period of constant increase, the bond decreased the next day by q dollars and the investor decided to sell the bond that day for v dollars. When did the investor sell the bond if: See attached file.

A Wednesday of the same week.
B Thursday of the same week.
C Friday of the same week.
D Monday of the next week.
E Tuesday of the next week

had to guess on this one... and missed it by one day...
I was not sure how to approach this problem... I hope that something like this does not show up on the real GMAT...

p(1+r/100)^n -q = v
p(1+sqrt((v+q)/p)-1)^n-q =v
[sqrt((v+q)/p)]^n = (v+q)/p
let (v+q)/p = a
[sqrt(a)]^n = a
Thus n=2 (2days of increases + 1 day of decrease)
Monday+3 = Thursday..
B it is.

How are you getting value for r to sub in eqn

heman
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05 Aug 2006, 21:13
freetheking wrote:
heman wrote:
How are you getting value for r to sub in eqn

heman

See attached file

Sure
Attachments

interest_192.doc [23.5 KiB]

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The only thing that matters is what you believe.

Manager
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06 Aug 2006, 13:09
the idea to this problem is to maniputale the given equation to make it look like the compound interest formula.

the OA is B
and OE see below:

Letâ€™s compare this simplified equation to the compound interest formula. Notice that r in this simplified equation (and in the question) is not the same as the r in the compound interest formula. In the formula, the r is already expressed as a decimal equivalent of a percent, in the question the interest is r percent. The simplified equation, however, deals with this discrepancy by dividing r by 100.

In our simplified equation, the cost of the bond (p), corresponds to the principle (P) in the formula, and the final bond price (v) corresponds to the final value (F) in the formula. Notice also that the exponent 2 corresponds to the x in the formula, which is the number of compounding periods. By comparing the simplified equation to the compound interest formula then, we see that the equation tells us that the bond was compounded twice (i.e. for two days) at the daily interest rate of p percent, i.e the p( 1+(r/100))2 portion of the expression. Then it lost a value of q dollars on the third day, i.e. the â€œâ€“ qâ€
06 Aug 2006, 13:09
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