|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
02 Aug 2018, 00:21
Kudos
Bookmarks
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
68% (02:35) correct
32%
(02:08)
wrong
based on 201
sessions
History
Date
Time
Result
Not Attempted Yet
If $1000 is placed into account X, yielding 10% interest compounded annually and $1000 is placed into account Y using 10% simple annual interest, how much more will be in account X than in account Y at the end of 5 years?
A. $0
B. $100
C. $110.51
D. $133.31
E. $146.41
A. $0
B. $100
C. $110.51
D. $133.31
E. $146.41
02 Aug 2018, 02:52
Kudos
Bookmarks
S.I = P*T*R / 100 = 1000 * 5 * 0.1 = 500
C.I = P*( 1 + R/100 )^nt - P = 1000 * ( 1 + 0.1 )^5 - 1000 = 1610.51 - 1000 = 610.51
C.I - S.I = 610.51 - 500 = 110.51
Hence, C.
C.I = P*( 1 + R/100 )^nt - P = 1000 * ( 1 + 0.1 )^5 - 1000 = 1610.51 - 1000 = 610.51
C.I - S.I = 610.51 - 500 = 110.51
Hence, C.
02 Aug 2018, 03:30
Kudos
Bookmarks
Bunuel
A simple interest of 10% every year will increase the principal by 0.1(x will become 1.1) in a year.
The principal will increase by the same time every year and becomes \(x + 5(0.1x) = 1.5x\) in 5 years.
On the contrary, the compound interest will be \(x*(1.1)^5 = x(1.331*1.21) = 1.61051x\)
The difference between the amount in account X and account Y is \(1.61051x - 1.5x = 0.11051x\)
Therefore, since the amount placed is $1000, there is 0.11051*1000 = $110.51(Option C) more in account X.
