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# An investment of d dollars at K percent simple annual

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Manager
Joined: 07 Jun 2007
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An investment of d dollars at K percent simple annual [#permalink]

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07 Aug 2007, 22:17
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

An investment of d dollars at K percent simple annual interest yields \$600 interest over a two year period. In terms of d, what dollar amt invested at the same rate will yield \$ 2400 interest over a 3 year period.

A) 2d/3 B) 3d/4 C) 4d/3 D) 3d/2 E) 8d/3

pls explain y oa is E.

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GMAT Club Legend
Joined: 07 Jul 2004
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Location: Singapore

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08 Aug 2007, 01:02
I = principal * rate * time
600 = d * k/100 * 2
300/d = k/100

2400 = principal * k/100 * 3
800 = principal * 300/d
principal = 8d/3

GMAT seldoms tests interest calculation. But it doesn't hurt to know the simple interest and compound interest formula.

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Director
Joined: 12 Jul 2007
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08 Aug 2007, 04:10
another way to do it would be:

interest on D = \$300/year (600/2 = 300)
you want \$2,400 over 3 years
2400/3 = 800/year in interest

800/300 = 8/3D or answer E

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Manager
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08 Aug 2007, 06:06
in this case it is easier to plug in

make d=6000 k=5% and u'll have 600 for 2 years

so if you make d=16000 u got 2400 for 3 years

thus,

16000/6000 = 8/3d

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Director
Joined: 12 Jul 2007
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08 Aug 2007, 06:20
that still seems longer than looking at it like this:

you make \$300/year at this level. You need to make \$800/year at this new level. What do you multiply D by to get from 3 to 8? 8/3!

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08 Aug 2007, 06:20
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