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11 Jun 2025, 00:30
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D
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Difficulty:
15%
(low)
Question Stats:
93% (01:08) correct
7%
(01:44)
wrong
based on 54
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An investor purchases a certificate of deposit with a fixed interest rate of 2% per year, compounded annually, and a term of five years. At the end of the fifth year, how much interest has the investment earned?
(1) At the end of the first year, the value of the investment is $5,100.
(2) At the end of the third year, the value of the investment is $5,306.04.
Gentle note to all experts and tutors: Please refrain from replying to this question until the Official Answer (OA) is revealed. Let students attempt to solve it first. You are all welcome to contribute posts after the OA is posted. Thank you all for your cooperation!
(1) At the end of the first year, the value of the investment is $5,100.
(2) At the end of the third year, the value of the investment is $5,306.04.
Gentle note to all experts and tutors: Please refrain from replying to this question until the Official Answer (OA) is revealed. Let students attempt to solve it first. You are all welcome to contribute posts after the OA is posted. Thank you all for your cooperation!
11 Jun 2025, 00:57
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R=2%
T=5
P=?
I = P(1+2/100)^5 - P
Need P to calculate I
S1
5100 = P+PRT/100 = P(1+RT/100) = P(1+1/10)
P can be calculated
Sufficient
S2
5,306.04 = P(1+R/100)^T = P(1+2/100)^3
P can be calculated
Sufficient
Answer D
T=5
P=?
I = P(1+2/100)^5 - P
Need P to calculate I
S1
5100 = P+PRT/100 = P(1+RT/100) = P(1+1/10)
P can be calculated
Sufficient
S2
5,306.04 = P(1+R/100)^T = P(1+2/100)^3
P can be calculated
Sufficient
Answer D
Bunuel
11 Jun 2025, 04:13
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Bunuel
Rate of interest = 2% compounded annually
Term = 5 years.
Amount at the end of 5 years = ?
Statement 1:
(1) At the end of the first year, the value of the investment is $5,100.
P(1+(2/100)) = 5100. We can get the value of P.
Using it, we can calculate the interest earned for 5 years.
Hence, sufficient
Statement 2:
(2) At the end of the third year, the value of the investment is $5,306.04.
P(1+(2/100)) ^3 = 5306.04. We can get the value of P.
Using it, we can calculate the interest earned for 5 years.
Hence, sufficient
Option D
