GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 17 Feb 2019, 18:17

### 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 February
PrevNext
SuMoTuWeThFrSa
272829303112
3456789
10111213141516
17181920212223
242526272812
Open Detailed Calendar
• ### Free GMAT Algebra Webinar

February 17, 2019

February 17, 2019

07:00 AM PST

09:00 AM PST

Attend this Free Algebra Webinar and learn how to master Inequalities and Absolute Value problems on GMAT.
• ### Valentine's day SALE is on! 25% off.

February 18, 2019

February 18, 2019

10:00 PM PST

11:00 PM PST

We don’t care what your relationship status this year - we love you just the way you are. AND we want you to crush the GMAT!

# An investment compounds annually at an interest rate of 34.1

Author Message
TAGS:

### Hide Tags

Director
Joined: 29 Nov 2012
Posts: 749
An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

22 Jun 2013, 21:45
2
00:00

Difficulty:

65% (hard)

Question Stats:

57% (01:58) correct 43% (01:55) wrong based on 159 sessions

### HideShow timer Statistics

An investment compounds annually at an interest rate of 34.1% What is the smallest investment period by which time the investment will more than triple in value?

A 3
B 4
C 6
D 9
E 12
Manager
Status: Training
Joined: 03 Jun 2013
Posts: 89
GPA: 3.7
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

22 Jun 2013, 21:53
2
Hey, not 100% sure what the best way of doing this would be, but here was my approach:

34.1% is just over 1/3, so essentially we want to solve the following equation:

(4/3)^x = 3

4/3 * 4/3 = 16/9 ~ a little less than 1.8
(a little less than 1.8)^2 ~ a little more than 3.

So our answer was (4/3)^4; i.e, 4 years of compounding.
_________________

KUDOS please if my post was useful!

Intern
Joined: 04 May 2013
Posts: 44
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

12 Aug 2013, 16:57
mattce wrote:
Hey, not 100% sure what the best way of doing this would be, but here was my approach:

34.1% is just over 1/3, so essentially we want to solve the following equation:

(4/3)^x = 3

4/3 * 4/3 = 16/9 ~ a little less than 1.8
(a little less than 1.8)^2 ~ a little more than 3.

So our answer was (4/3)^4; i.e, 4 years of compounding.

Can you explain this a little more?
Where do you come up with (4/2)^x = 3?
Why are you multiplying 4/3*4/3?
Manager
Joined: 24 Nov 2012
Posts: 157
Concentration: Sustainability, Entrepreneurship
GMAT 1: 770 Q50 V44
WE: Business Development (Internet and New Media)
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

13 Aug 2013, 06:15
1
jjack0310 wrote:
mattce wrote:
Hey, not 100% sure what the best way of doing this would be, but here was my approach:

34.1% is just over 1/3, so essentially we want to solve the following equation:

(4/3)^x = 3

4/3 * 4/3 = 16/9 ~ a little less than 1.8
(a little less than 1.8)^2 ~ a little more than 3.

So our answer was (4/3)^4; i.e, 4 years of compounding.

Can you explain this a little more?
Where do you come up with (4/2)^x = 3?
Why are you multiplying 4/3*4/3?

Assume initial amount is x
Annual Interest is 34.1% so after 1 year the amount will become x * (100+34.1)/100 => x*4/3

now we need to find n for x * (4/3)^n = 3x

or in other words n = 4
_________________

You've been walking the ocean's edge, holding up your robes to keep them dry. You must dive naked under, and deeper under, a thousand times deeper! - Rumi

http://www.manhattangmat.com/blog/index.php/author/cbermanmanhattanprep-com/ - This is worth its weight in gold

Economist GMAT Test - 730, Q50, V41 Aug 9th, 2013
Manhattan GMAT Test - 670, Q45, V36 Aug 11th, 2013
Manhattan GMAT Test - 680, Q47, V36 Aug 17th, 2013
GmatPrep CAT 1 - 770, Q50, V44 Aug 24th, 2013
Manhattan GMAT Test - 690, Q45, V39 Aug 30th, 2013
Manhattan GMAT Test - 710, Q48, V39 Sep 13th, 2013
GmatPrep CAT 2 - 740, Q49, V41 Oct 6th, 2013

GMAT - 770, Q50, V44, Oct 7th, 2013
My Debrief - http://gmatclub.com/forum/from-the-ashes-thou-shall-rise-770-q-50-v-44-awa-5-ir-162299.html#p1284542

Intern
Joined: 15 Aug 2011
Posts: 17
Location: United States
Concentration: Marketing, Technology
GPA: 3.6
WE: Project Management (Computer Software)
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

13 Aug 2013, 09:10
1
fozzzy wrote:
An investment compounds annually at an interest rate of 34.1% What is the smallest investment period by which time the investment will more than triple in value?

A 3
B 4
C 6
D 9
E 12

Compound Interest Formula:

$$A = P (1+r/100)^n$$
where A = Final amount after the Prinicipal 'P' is compouned for 'n' years at the rate 'r' per year.
From the question we understand -

$$3P >= P(1+34.1/100)^n$$

we need to find the value of 'n'
==> $$3>=(1.341)^n$$
==> for the equation to satisfy, n can take a value of >= 4

_________________

"Hit KUDOS if you like my explanation"

Senior Manager
Joined: 10 Jul 2013
Posts: 313
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

13 Aug 2013, 12:56
fozzzy wrote:
An investment compounds annually at an interest rate of 34.1% What is the smallest investment period by which time the investment will more than triple in value?

A 3
B 4
C 6
D 9
E 12

............
compounded amount = p(1+r/100)^t
or, I + p = p (1+r/100)^t
or, 2p + p = p (1+r/100)^t
or, 3 = (1.342)^t

t has to be more than 3, so t = 4 (Answer)

but this is not gmat type problem.......i think
_________________

Asif vai.....

Board of Directors
Joined: 17 Jul 2014
Posts: 2587
Location: United States (IL)
Concentration: Finance, Economics
GMAT 1: 650 Q49 V30
GPA: 3.92
WE: General Management (Transportation)
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

24 Oct 2015, 12:24
I believe there is an easier approach.
Think in terms of simple interest.
34.1 is added each year. clearly, if you multiply this by 10, it gives 341, which is way over 200\$ that we need to add in order to triple our investment.
Just by thinking this way, we can eliminate D and E, since E is more than 10 and 9..well..if we multiply by 9, it is still way over 200.
Take 6 now, well, 6 x34.1 is little bit over 200. Now we're getting closer. Since 6 y with simple interest will triple the investment, then compounded interest will have a greater return, so C is out.
Take A. suppose we have 100 initial investment. After first year, we have 134.1. Now, 13.41 is 10%. Suppose we have 30% return. Now we have 39+ interest in the second year. That gets us to 134.1+39+ which is 173+. again, 17.3 is 10%, 30% is 51+, 173+51 gets us to 224+, slightly more than 224, but not enough to be 300. SO a is out, and B is the answer.
Non-Human User
Joined: 09 Sep 2013
Posts: 9838
Re: An investment compounds annually at an interest rate of 34.1  [#permalink]

### Show Tags

15 Oct 2018, 20:32
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
Re: An investment compounds annually at an interest rate of 34.1   [#permalink] 15 Oct 2018, 20:32
Display posts from previous: Sort by