After adding a simple interest of $ 270 an investment becomes $1395

[quote="vikasp99"]After adding a simple interest of $ 270 an investment becomes $1395. If the principal was invested at 6% p.a. simple interest, for how long was the principal invested.

A) 3 Years

B) 4 Years

C) 5 Years

D) 6 Years

E) 7 Years/quote]
Dear vikasp99,

I'm happy to respond.

This question is atrocious. "After adding a simple interest of $270"--was this question written by someone who is fluent in English?? What on earth does this wildly ungrammatical statement mean? Let's assume that is means that the simple interest payment for a single year is $270.

The principal P is unknown. In simple interest (which exists in absolutely no place in the world other than in math books), the interest each year is the same. Thus, we know that 6% of the principal is $270.
0.06P = 270
0.02P = 90
0.01P = 45
P = 4500
This interpretation leads to more principal than the total amount in the account. This will not work.

Perhaps the author means that the total amount of simple interest added, over the course of the whole investment, is $270. Then the principal would be
P = $1395 - $270 = $1125
Now, we need 6% of that.
1% of P = $11.25
double that
2% of P = $22.50
now, triple that
6% of P = $67.50

Now, how many $67.50 amounts would make up that total interest amount of $270? Well, $67.50 is close to $70, and 4 times $70 is $280, which is very close to $270. There must have been four simple interest payments, so it took four years to get the final amount of $1350.

The question is exceptionally poorly worded. One requirement of writing high quality GMAT Quant practice questions is a thorough command of the English language. Furthermore, this question is unrealistic: the GMAT seldom asks about simple interest, only because this is something that is never used in the real world.

Here's a blog about somewhat more real-world interest problems.
Compound Interest on the GMAT

Does all this make sense?
Mike