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If $1000 is deposited in a certain bank account and remains

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Senior Manager
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If $1000 is deposited in a certain bank account and remains [#permalink] New post 09 Dec 2006, 09:43
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If $1000 is deposited in a certain bank account and remains in the account along with any accumulated interest, the dollar amount of interest,I, earned by the deposit in the first 'n' years is given by the formula I= 1000[(1+r/100)^n-1] where r is the annual rate of interest paid by the bank. Is the annual interest rate paid by the bank is greater than 8 %

1) The deposit earns a total of $210 in interest in the first two year
2) (1+r/100)^2>1.15
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 [#permalink] New post 09 Dec 2006, 11:23
A) for me

From 1) We know the interest earned and the initial amount so can calculate interest rate.

From 2) Taking sq root of 1.15 is <8% So interest rate could be 7.5% or 20%
INSUFF
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 [#permalink] New post 09 Dec 2006, 12:31
MBAlad wrote:
A) for me

From 1) We know the interest earned and the initial amount so can calculate interest rate.

From 2) Taking sq root of 1.15 is <8% So interest rate could be 7.5% or 20%
INSUFF


I didn't get ur second point. Could you plz explain it a bit more? thanks
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 [#permalink] New post 09 Dec 2006, 18:24
arjsingh1976 wrote:
MBAlad wrote:
A) for me

From 1) We know the interest earned and the initial amount so can calculate interest rate.

From 2) Taking sq root of 1.15 is <8% So interest rate could be 7.5% or 20%
INSUFF


I didn't get ur second point. Could you plz explain it a bit more? thanks



Second statement is: 2) (1+r/100)^2>1.15

Take root of both sides = (1+r/100) > 1.072 (approx)

Therefore interest could be 7.5%, 8% or higher - insufficient info to answer question.

Is that ok?
  [#permalink] 09 Dec 2006, 18:24
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