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01 Feb 2018, 23:28
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35% (medium)

Question Stats:

75% (01:05) correct 25% (01:03) wrong based on 40 sessions

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$2000 is deposited into a savings account that earns interest at the rate of 10 percent per year, compounded semiannually. How much money will there be in the account at the end of one year? (A)$2105

(B) $2200 (C)$2205

(D) $2400 (E)$2600

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Re: $2000 is deposited into a savings account that earns interest at the [#permalink] Show Tags 02 Feb 2018, 00:11 Bunuel wrote:$2000 is deposited into a savings account that earns interest at the rate of 10 percent per year, compounded semiannually. How much money will there be in the account at the end of one year?

(A) $2105 (B)$2200

(C) $2205 (D)$2400

(E) $2600 Compounded Semiannually Means that calculation of principal happens after every six months hence the % increase in every six month = 10/2 = 5% i.e. if the invested money = 100 Money after 6 months = 100+(5/100)*100 = 105 Money After 12 months = 105+(5/100)*105 = 110.25 Now given that money invested =$2000

i.e. 100 = $2000 so 110.25 = ($2000/100) *110.25 = $2205 Answer: option C _________________ Prosper!!! GMATinsight Bhoopendra Singh and Dr.Sushma Jha e-mail: info@GMATinsight.com I Call us : +91-9999687183 / 9891333772 Online One-on-One Skype based classes and Classroom Coaching in South and West Delhi http://www.GMATinsight.com/testimonials.html 22 ONLINE FREE (FULL LENGTH) GMAT CAT (PRACTICE TESTS) LINK COLLECTION Board of Directors Status: QA & VA Forum Moderator Joined: 11 Jun 2011 Posts: 3750 Location: India GPA: 3.5 WE: Business Development (Commercial Banking) Re:$2000 is deposited into a savings account that earns interest at the  [#permalink]

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02 Feb 2018, 07:36
Bunuel wrote:
$2000 is deposited into a savings account that earns interest at the rate of 10 percent per year, compounded semiannually. How much money will there be in the account at the end of one year? (A)$2105

(B) $2200 (C)$2205

(D) $2400 (E)$2600

$$A = P(1 + \frac{r}{n})^{nt}$$

$$A = 2000(1 + \frac{10}{200})^{2*1}$$

Amount is $2205 , Answer will be (C) _________________ Thanks and Regards Abhishek.... PLEASE FOLLOW THE RULES FOR POSTING IN QA AND VA FORUM AND USE SEARCH FUNCTION BEFORE POSTING NEW QUESTIONS How to use Search Function in GMAT Club | Rules for Posting in QA forum | Writing Mathematical Formulas |Rules for Posting in VA forum | Request Expert's Reply ( VA Forum Only ) Target Test Prep Representative Status: Founder & CEO Affiliations: Target Test Prep Joined: 14 Oct 2015 Posts: 3161 Location: United States (CA) Re:$2000 is deposited into a savings account that earns interest at the  [#permalink]

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05 Feb 2018, 10:27
Bunuel wrote:
$2000 is deposited into a savings account that earns interest at the rate of 10 percent per year, compounded semiannually. How much money will there be in the account at the end of one year? (A)$2105

(B) $2200 (C)$2205

(D) $2400 (E)$2600

Since the rate is compounded semiannually, each six months, the principal earns 5% interest during each compounding period.

After the first 6 months, the account is worth 1.05 x 2000 = $2100. After the next 6 months, the account is worth 1.05 x 2100 =$2,205.

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