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# Compound Interest - GMAT PREP

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Senior Manager
Joined: 01 Feb 2005
Posts: 274
Followers: 1

Kudos [?]: 40 [0], given: 1

Compound Interest - GMAT PREP [#permalink]  31 May 2006, 15:08
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Manager
Joined: 25 May 2006
Posts: 227
Followers: 1

Kudos [?]: 23 [1] , given: 0

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
Joined: 12 Feb 2006
Posts: 115
Followers: 1

Kudos [?]: 26 [0], given: 0

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.
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