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# m07#21

Author Message
CEO
Status: Nothing comes easy: neither do I want.
Joined: 12 Oct 2009
Posts: 2795
Location: Malaysia
Concentration: Technology, Entrepreneurship
Schools: ISB '15 (M)
GMAT 1: 670 Q49 V31
GMAT 2: 710 Q50 V35
Followers: 223

Kudos [?]: 1559 [0], given: 235

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11 Jul 2010, 03:56
If a 5-year construction project is structured to double the investment every succeeding year, what percentage of the total cost was invested in the first year?

* 12.5%
* 10%
* 8.25%
* 5%
* 3%

Though I got the right answer but I m not convinced with the official explanation.

[Reveal] Spoiler: OE
Let's say we invested $10 the first year. The second year it will be$20 more, third - $40 more, fourth -$80 more, and fifth - \$160 more. Now, add them: 10+20+40+80+160 = 310. So, the original investment was $$\frac{10}{310}$$ or $$\frac{1}{31}$$ or about 3%.

[Reveal] Spoiler: my explanation
In first year - x
After 1st year - 2x
After 2nd year - 4x
After 3rd year - 8x
After 4th year - 16x
After 5th year - 32x

so %age = 1/32 * 100 = approx 3%

Bunnel letme know if my method is wrong.
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Manager
Joined: 06 Oct 2009
Posts: 69
Followers: 2

Kudos [?]: 34 [1] , given: 5

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11 Jul 2010, 18:13
1
KUDOS
Gurpreet, yes your method is wrong because you shouldn't calculate after 5th year(by which you actually including the 6th year investment also)

Also, to get the total investment you have to add all the years' investment.

Hope you are clear
Posted from my mobile device
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+1 kudos me if this is of any help...

Manager
Affiliations: The Earth organization, India
Joined: 25 Dec 2010
Posts: 193
WE 1: SAP consultant-IT 2 years
WE 2: Entrepreneur-family business 2 years
Followers: 5

Kudos [?]: 13 [0], given: 12

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02 Jun 2011, 09:56
I partially agree with gurpreet

the amount after 1st year = 2x or 2

after 5th year = 32x or 32

is it not so ?
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Re: m07#21   [#permalink] 02 Jun 2011, 09:56
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# m07#21

Moderator: Bunuel

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