interest : Quant Question Archive [LOCKED]
Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 16 Jan 2017, 21:01

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

interest

Author Message
Senior Manager
Joined: 30 May 2005
Posts: 276
Followers: 1

Kudos [?]: 35 [0], given: 0

Show Tags

17 Aug 2005, 13:30
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

hello

Feng invests his bonus check in a bank account that pays 20%
interest, compounded annually. How many years will it take
for the initial balance in this account to double in value?

A. 2
B. 3
C. 4
D. 5
E. 6

plz shows your works and reasoning
thanks
Senior Manager
Joined: 30 May 2005
Posts: 276
Followers: 1

Kudos [?]: 35 [0], given: 0

Show Tags

17 Aug 2005, 15:12
I have tried 2 approaches

P be the principal, the begining amount

compound interest interest formula (1+r/100)^n
r rate of interest

n number of period in a year here once a year

so first approach i could n 't get through
P+P((1+2O/100)^n)= 2P
p +P(6/5)^n =2 P

get stuck here
so
other approach

2p=P((1+2O/100)^n)

2p /p=(1+2O/100)^n)

2=6/5^n
n = 4
Manager
Joined: 19 Jul 2005
Posts: 54
Followers: 1

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

Show Tags

17 Aug 2005, 22:35
Can u try like

First year=1+20%=1.2
Second year=1.2(.2)+1.2=1.44
Third year=1.44(.2)+1.44=1.728
Fourt year=1.728(.2)+1.728=2.03756

So the answer is 4. It just took one minute and 40 seconds
Manager
Joined: 14 Jul 2005
Posts: 104
Location: Sofia, Bulgaria
Followers: 1

Kudos [?]: 9 [0], given: 0

Show Tags

17 Aug 2005, 23:19
I think that for this question Ali's approach is more efficient. You just need to do some relatively simple calculations and you are done.

Mandy, you got stuck with your first approach, because you counted the principal twice. The left side of the equation below is already greater than 2P.

P+P((1+2O/100)^n)= 2P

SVP
Joined: 03 Jan 2005
Posts: 2243
Followers: 16

Kudos [?]: 324 [0], given: 0

Show Tags

18 Aug 2005, 06:03
Hmmm what I might do is this (especially if I'm short on time):
Write the following in the scrap paper:
1.2
1.2*1.2=1.44
1.2^3
1.2^4=1.44^2

As 1.4^2=1.96 I can be pretty sure that 1.44^2>2 So I'd pick 4 (C). If I have time I will actually do 1.44*1.44 to make sure I'm right.
_________________

Keep on asking, and it will be given you;
keep on seeking, and you will find;
keep on knocking, and it will be opened to you.

Senior Manager
Joined: 29 Nov 2004
Posts: 484
Location: Chicago
Followers: 1

Kudos [?]: 25 [0], given: 0

Show Tags

18 Aug 2005, 07:48
I think the best way is using 100...

100
1 year - 120
2 year - 144
3 year - 172.8
4 year - should be over 200 so C
_________________

Fear Mediocrity, Respect Ignorance

Manager
Joined: 07 Oct 2004
Posts: 99
Followers: 1

Kudos [?]: 17 [0], given: 0

Show Tags

18 Aug 2005, 10:40
Obviously no investors around here.. It's a good thing none of us have business school aspirations!

The "rule of 72" is the quickest way. A balance earning X% annually will double in 72/X years. Lucky that it applies on this question--probably won't be so fortunate on the exam.
Manager
Joined: 14 Jul 2005
Posts: 104
Location: Sofia, Bulgaria
Followers: 1

Kudos [?]: 9 [0], given: 0

Show Tags

18 Aug 2005, 11:44
eastcoaster9 wrote:
Obviously no investors around here.. It's a good thing none of us have business school aspirations!

The "rule of 72" is the quickest way. A balance earning X% annually will double in 72/X years. Lucky that it applies on this question--probably won't be so fortunate on the exam.

good one, eastcoaster
Manager
Joined: 06 Aug 2005
Posts: 197
Followers: 3

Kudos [?]: 12 [0], given: 0

Show Tags

18 Aug 2005, 12:17
Depending on the interest rate, the Rule of 72 is also known as the Rule of 70. As the rate gets infinitessimally small, it becomes the rule of 69.315

since (1+n)^(1/n) = e as n->0

And the logarithm(base e) of 2 = 0.69315
18 Aug 2005, 12:17
Display posts from previous: Sort by