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 Your Progress
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
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:
Join a 4-day FREE online boot camp to kick off your GMAT preparation and get you into your dream b-school in R2.**Limited for the first 99 registrants. Register today!
Does GMAT RC seem like an uphill battle? e-GMAT is conducting a free webinar to help you learn reading strategies that can enable you to solve 700+ level RC questions with at least 90% accuracy in less than 10 days. Sat., Oct 19th at 7 am PDT
Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid
[#permalink]
Show Tags
Updated on: 06 Feb 2019, 02:04
3
00:00
A
B
C
D
E
Difficulty:
35% (medium)
Question Stats:
81% (01:50) correct 19% (02:04) wrong based on 73 sessions
HideShow timer Statistics
Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid interest at 12% p.a., interest being compounded quarterly. what is the expected total amount of interest which must be paid on this certificate by the end of 6 months?
Re: Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid
[#permalink]
Show Tags
25 Aug 2016, 07:52
1
yosita18 wrote:
Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid interest at 12% p.a., interest being compounded quarterly. what is the expected total amount of interest which must be paid on this certificate by the end of 6 months?
Ans: $6090
There might be many ways of calculating Compound Interest. But, when I use the following formula: A = P (1+R/C)^NC
P = Principal Amount R = Annual Interest Rate (as a Decimal) C = Number of "Compoundings" Per Year N = Number of Years A = Final Amount
Can you please help solve this question using the above formula?
You've already mentioned the formula, just substitute the values. \(A = 1,00,000 ( 1 + \frac{12}{400})^2\) raised to 2 because the question asks for only \(\frac{1}{2}\) year and \(\frac{1}{2}*4 = 2\) = \(10^5(1.03)^2 = 1,06,090.\)
Re: Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid
[#permalink]
Show Tags
25 Aug 2016, 10:15
1
3
yosita18 wrote:
Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid interest at 12% p.a., interest being compounded quarterly. what is the expected total amount of interest which must be paid on this certificate by the end of 6 months?
Ans: $6090
There might be many ways of calculating Compound Interest. But, when I use the following formula: A = P (1+R/C)^NC
P = Principal Amount R = Annual Interest Rate (as a Decimal) C = Number of "Compoundings" Per Year N = Number of Years A = Final Amount
Can you please help solve this question using the above formula?
Another way to solve this question without using formula.
Since, interest is compounded quarterly, I can say 3% per quarter.
Now, Principle is 1,00,000 .
Apply 3% interest on it , you will get interest earned = 3000
Now after 1st quarter, New principle will be 103000
Again apply 3% on the new principle, you will get New principle = 106090.
Hence, Interest earned in 6 months = 6090.
_________________
Re: Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid
[#permalink]
Show Tags
06 Feb 2019, 01:56
yosita18 wrote:
Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid interest at 12% p.a., interest being compounded quarterly. what is the expected total amount of interest which must be paid on this certificate by the end of 6 months?
(A) $5940 (B) $5000 (C) $6020 (D) $6090 (E) $5050
There might be many ways of calculating Compound Interest. But, when I use the following formula: A = P (1+R/C)^NC
P = Principal Amount R = Annual Interest Rate (as a Decimal) C = Number of "Compoundings" Per Year N = Number of Years A = Final Amount
Can you please help solve this question using the above formula?
Dear Moderator, Can OA for this question please be updated, Thank you.
_________________
Re: Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid
[#permalink]
Show Tags
06 Feb 2019, 02:04
stne wrote:
yosita18 wrote:
Fiona purchased a 1-year, $1,00,000 certificate of deposit that paid interest at 12% p.a., interest being compounded quarterly. what is the expected total amount of interest which must be paid on this certificate by the end of 6 months?
(A) $5940 (B) $5000 (C) $6020 (D) $6090 (E) $5050
There might be many ways of calculating Compound Interest. But, when I use the following formula: A = P (1+R/C)^NC
P = Principal Amount R = Annual Interest Rate (as a Decimal) C = Number of "Compoundings" Per Year N = Number of Years A = Final Amount
Can you please help solve this question using the above formula?
Dear Moderator, Can OA for this question please be updated, Thank you.
close
81% (01:50) correct 
