If money is invested at r percent interest, compounded annua

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If money is invested at r percent interest, compounded annua [#permalink]

17 Dec 2012, 06:46

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71% (02:22) correct

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If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years. If Pat's parents invested $5,000 in a long-term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of the investment 18 years later, when Pat is ready for college?

(A) $20000
(B) $15000
(C) $12000
(D) $10000
(E) $9000

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Re: If money is invested at r percent interest, compounded annua [#permalink]

17 Dec 2012, 06:48

Walkabout wrote:

Since investment doubles in 70/r years, then for r=8 it'll double in 70/8=~9 years (we are not asked about the exact amount so such an approximation will do). Thus in 18 years investment will double twice and become ($5,000*2)*2=$20,000 (after 9 years investment will become $5,000*2=$10,000 and in another 9 years it'll become $10,000*2=$20,000).

Answer: A.
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Re: If money is invested at r percent interest, compounded annua [#permalink] 17 Dec 2012, 06:48

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If money is invested at r percent interest, compounded annua

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If money is invested at r percent interest, compounded annua

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