Compound Interest - GMAT PREP : Quant Question Archive [LOCKED]
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Compound Interest - GMAT PREP

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Senior Manager
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Compound Interest - GMAT PREP [#permalink]

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31 May 2006, 15:08
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Manager
Joined: 25 May 2006
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31 May 2006, 15:35
1
KUDOS
5

Compound Int = P(1+r)^n

Tim:
CI=1000(1+.1)^2 =1000(1.21)=1,210
Lana:
CI=2000(1+.05)^2=2000(1.1025)=2,205

Tim Int = 210
Lana Int = 205

Dif: 210-205 = 5
Manager
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31 May 2006, 20:32
They earned the same amount the first year ($100.) So it all comes down to the difference between 5% and 10% on$100 or \$5.

That is how I approached it. Admitedly X & Y's is probably better.
31 May 2006, 20:32
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