GMAT Question of the Day: Daily via email | Daily via Instagram New to GMAT Club? Watch this Video

 It is currently 29 Jan 2020, 14:26

### 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

# An investor opened a money market account with a single deposit of \$60

Author Message
TAGS:

### Hide Tags

Senior Manager
Joined: 03 Apr 2013
Posts: 263
Location: India
Concentration: Marketing, Finance
GMAT 1: 740 Q50 V41
GPA: 3
Re: An investor opened a money market account with a single deposit of \$60  [#permalink]

### Show Tags

22 Apr 2017, 01:45
cccmom wrote:
An investor opened a money market account with a single deposit of \$6000 on Dec. 31, 2001. The interest earned on the account was calculated and reinvested quarterly. The compound interest for the first 3 quarters of 2002 was \$125, \$130, and \$145, respectively. If the investor made no deposits or withdrawals during the year, approximately what annual rate of interest must the account earn for the 4th quarter in order for the total interest earned on the account for the year to be 10 percent of the initial deposit?

A. 3.1%
B. 9.3%
C. 10.0%
D. 10.5%
E. 12.5%

I got the answer as 3.1 first. But then realized it has to be multiplied by 4 to adjust for making it annual rate. Bunuel Please suggest some literature to read about the conversions and tough questions based on them.
Director
Joined: 29 Jun 2017
Posts: 954
Re: An investor opened a money market account with a single deposit of \$60  [#permalink]

### Show Tags

15 Sep 2018, 07:59
is this from gmatprep ?

if this is, pls , show the screen ?
Manager
Joined: 19 Jan 2018
Posts: 87
An investor opened a money market account with a single deposit of \$60  [#permalink]

### Show Tags

10 Nov 2019, 14:50
Initial Investment = \$6,000
Interest Occured in the first 3 Quarters: 125 + 130 + 145 = \$400
We want total interest to be 10% of the inital investement (\$6,000), or \$600
So quarter 4 has to earn 600 - 400 =\$200 worth of interest

To find the interest rate, take the Interest earned in Q4 divided by the total amount (Initial Investment + 3 quarters of interest)
200/6400

When we simplify that we get 1/32 BUT WE CAN'T STOP HERE:
That gives us the interest rate per quarter, to find the annual interest rate, you have to multiply that by 4.
You get 1/8 = 12.5%[/m]

An investor opened a money market account with a single deposit of \$60   [#permalink] 10 Nov 2019, 14:50

Go to page   Previous    1   2   [ 23 posts ]

Display posts from previous: Sort by