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12 Jan 2004, 11:42
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I just wanted everyones opinion on whether you think the following is a likely GMAT question. How much about Compound Interest are we expected to know.
Q. The Compound Interest compounded annually, on an investment for the second year is $2200 and for the third year is $2420. What is the rate of interest and the principal invested?
You don't have to solve it, unless you think we need to know it.
Cheers.
Q. The Compound Interest compounded annually, on an investment for the second year is $2200 and for the third year is $2420. What is the rate of interest and the principal invested?
You don't have to solve it, unless you think we need to know it.
Cheers.
Archived Topic
Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Where to now? Join ongoing discussions on thousands of quality questions in our Quantitative Questions Forum
Still interested in this question? Check out the "Best Topics" block below for a better discussion on this exact question, as well as several more related questions.
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12 Jan 2004, 11:57
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We could see it, sure.
Interest rate 10%
Princpal invested at start 20000
End of year one 22000 (year 1 interest 2000)
End of year two 24200 (year 2 interest 2200)
Year three interest 2420.
If we do see this, I bet the numbers won't be so easy, though. I got this one by looking...
Interest rate 10%
Princpal invested at start 20000
End of year one 22000 (year 1 interest 2000)
End of year two 24200 (year 2 interest 2200)
Year three interest 2420.
If we do see this, I bet the numbers won't be so easy, though. I got this one by looking...
13 Jan 2004, 14:03
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sunniboy007
I just wanted everyones opinion on whether you think the following is a likely GMAT question. How much about Compound Interest are we expected to know.
Q. The Compound Interest compounded annually, on an investment for the second year is $2200 and for the third year is $2420. What is the rate of interest and the principal invested?
You don't have to solve it, unless you think we need to know it.
Cheers.
Q. The Compound Interest compounded annually, on an investment for the second year is $2200 and for the third year is $2420. What is the rate of interest and the principal invested?
You don't have to solve it, unless you think we need to know it.
Cheers.
To solve general problems of the sort is simple if you set it up correctly:
P = Prin
R = Rate
I1 = 1st Int
12 = 2nd Int
P*R = I1
P*(1+R)*R = I2 = P*R*(1+R)
=> I1(1+R) = I2
=>R = (I2-I1)/I1
recall P*R=I1
=>P = I1/R
=> P = I1^2/(I2-I1)
Archived Topic
Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Where to now? Join ongoing discussions on thousands of quality questions in our Quantitative Questions Forum
Still interested in this question? Check out the "Best Topics" block above for a better discussion on this exact question, as well as several more related questions.
Thank you for understanding, and happy exploring!
