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If money is invested at r percent interest, compounded annua [#permalink]
 27 Jan 2013, 23:46
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If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 50/r years. If Luke's parents invested $12,500 in a long term bond that pays 12 percent interest compounded annually, what will be the approximate total amount of the investment 12 years later, when Luke is ready for college? A) 62,000 B) 85,500 C) 95,500 D) 100,500 E) 100,000 Don't be rude people, leave your kudo's here!
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Re: If money is invested at "r" percent interest, compounded.... [#permalink]
28 Jan 2013, 00:05
Can you provide the source of the question?.. I believe the answers are clustered together too closely to make viable options for an approximation question.
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Re: If money is invested at r percent interest, compounded annua [#permalink]
28 Jan 2013, 00:19
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laythesmack23 wrote: If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 50/r years. If Luke's parents invested $12,500 in a long term bond that pays 12 percent interest compounded annually, what will be the approximate total amount of the investment 12 years later, when Luke is ready for college?
A) 62,000
B) 85,500
C) 95,500
D) 100,500
E) 100,000
Don't be rude people, leave your kudo's here! Proper version of this question is from from Official Guide: If money is invested at r percent interest, compounded annually, the amount of investment will double in approximately 70/r years. If Pat's parents invested $ 5000 in a long term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of investment 18 years later, when Pat is ready for college?A. $20000 B. $15000 C. $12000 D. $10000 E. $9000 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. Discussed here: if-money-is-invested-at-r-percent-interest-compounded-annual-104225.html
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Re: If money is invested at "r" percent interest, compounded.... [#permalink]
31 Jan 2013, 16:06
MacFauz wrote: Can you provide the source of the question?.. I believe the answers are clustered together too closely to make viable options for an approximation question. OG guide, please see original question that Banuel listed above. I simply changed the #'s around, and changed the answer's to fit my revised question. Laythesmack23
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Re: If money is invested at "r" percent interest, compounded.... [#permalink]
31 Jan 2013, 23:22
laythesmack23 wrote: MacFauz wrote: Can you provide the source of the question?.. I believe the answers are clustered together too closely to make viable options for an approximation question. OG guide, please see original question that Banuel listed above. I simply changed the #'s around, and changed the answer's to fit my revised question. Laythesmack23 Understood.. Although the 70/N part should not be changed because then, the interest rate would not be in line with a compound interest... Otherwise the question is fine... I believe the answer choices should be more widely spread apart.. Using the formula for compound interest "C" will actually be closest value to the actual answer...
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Re: If money is invested at "r" percent interest, compounded....
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31 Jan 2013, 23:22
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