January 19, 2019 January 19, 2019 07:00 AM PST 09:00 AM PST Aiming to score 760+? Attend this FREE session to learn how to Define your GMAT Strategy, Create your Study Plan and Master the Core Skills to excel on the GMAT. January 20, 2019 January 20, 2019 07:00 AM PST 07:00 AM PST Get personalized insights on how to achieve your Target Quant Score.
Author 
Message 
TAGS:

Hide Tags

Manager
Status: GMAT Preperation
Joined: 04 Feb 2010
Posts: 91
Concentration: Social Entrepreneurship, Social Entrepreneurship
GPA: 3
WE: Consulting (Insurance)

If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
Updated on: 06 Apr 2018, 03:15
Question Stats:
74% (01:47) correct 26% (02:27) wrong based on 683 sessions
HideShow timer Statistics
If money is invested at r percent interest, compounded annually, the amount of investment will double in approximately 70/r years. If Pat's parents invested $ 5000 in a long term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of investment 18 years later, when Pat is ready for college? A. $20000 B. $15000 C. $12000 D. $10000 E. $9000 OPEN DISCUSSION OF THIS QUESTION IS HERE: https://gmatclub.com/forum/ifmoneyis ... 44266.html
Official Answer and Stats are available only to registered users. Register/ Login.
Originally posted by vanidhar on 04 Nov 2010, 03:53.
Last edited by Bunuel on 06 Apr 2018, 03:15, edited 2 times in total.
Edited the question.




Veritas Prep GMAT Instructor
Joined: 16 Oct 2010
Posts: 8795
Location: Pune, India

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
04 Nov 2010, 05:21
vanidhar wrote: If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years. If Pat’s parents invested $5,000 in a longterm bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of the investment 18 years later, when Pat is ready for college? (A) $20,000 (B) $1 5,000 (C) $1 2,000 (D) $1 0,000 (E) $ 9,000 There has to be a logic to why they gave you "If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years." If r = 8%, the principal will double in 70/8 = apprx 9 years. So in 9 years, 5000 will become 10,000. In another 9 years (i.e. 18 years from now) principal will double again and become $20,000.
_________________
Karishma Veritas Prep GMAT Instructor
Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options >




Senior Manager
Status: Not afraid of failures, disappointments, and falls.
Joined: 20 Jan 2010
Posts: 264
Concentration: Technology, Entrepreneurship
WE: Operations (Telecommunications)

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
04 Nov 2010, 08:41
Answer: AKarishma has already explained very well and I would like to add some fact here that would be valuable for our daily life problems. This fact of doubling investment (or growth) after every \(\frac{70}{r}\) where \(r\) is the \(%age\) growth or change per unit time, holds true for real life economy calculations. This isn't just true for this particular question but is actually true for our daily life. Check out the following video link (amazing facts) http://www.youtube.com/watch?v=FQA2rkpBSYHope it helps
_________________
"I choose to rise after every fall" Target=770 http://challengemba.blogspot.com Kudos??




Math Expert
Joined: 02 Sep 2009
Posts: 52294

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
13 Feb 2011, 12:05
If money is invested at r percent interest, compounded annually, the amount of investment will double in approximately 70/r years. If Pat's parents invested $ 5000 in a long term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of investment 18 years later, when Pat is ready for college? A. $20000 B. $15000 C. $12000 D. $10000 E. $9000 Since investment doubles in 70/r years then for r=8 it'll double in 70/8=~9 years (we are not asked about the exact amount so such an approximation will do). Thus in 18 years investment will double twice and become ($5,000*2)*2=$20,000 (after 9 years investment will become $5,000*2=$10,000 and in another 9 years it'll become $10,000*2=$20,000). Answer: A.
_________________
New to the Math Forum? Please read this: Ultimate GMAT Quantitative Megathread  All You Need for Quant  PLEASE READ AND FOLLOW: 12 Rules for Posting!!! Resources: GMAT Math Book  Triangles  Polygons  Coordinate Geometry  Factorials  Circles  Number Theory  Remainders; 8. Overlapping Sets  PDF of Math Book; 10. Remainders  GMAT Prep Software Analysis  SEVEN SAMURAI OF 2012 (BEST DISCUSSIONS)  Tricky questions from previous years.
Collection of Questions: PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.
What are GMAT Club Tests? Extrahard Quant Tests with Brilliant Analytics



Intern
Joined: 31 Aug 2012
Posts: 6

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
08 Sep 2012, 20:07
How do you know to divide by 8 and not .08?



Senior Manager
Joined: 15 Jun 2010
Posts: 297
Schools: IE'14, ISB'14, Kellogg'15
WE 1: 7 Yrs in Automobile (Commercial Vehicle industry)

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
08 Sep 2012, 22:50
go2013gmat wrote: How do you know to divide by 8 and not .08? Pay attention to the question stem. The relationship is in %age. So no need to divide it by 100. If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years. If Pat’s parents invested $5,000 in a longterm bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of the investment 18 years later, when Pat is ready for college?
_________________
Regards SD  Press Kudos if you like my post. Debrief 610540580710(Long Journey): http://gmatclub.com/forum/from600540580710finallyachievedin4thattempt142456.html



Manager
Joined: 24 Jul 2011
Posts: 66
Location: India
Concentration: Strategy, General Management
WE: Asset Management (Manufacturing)

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
09 Sep 2012, 04:44
Just to brush up a little theory about Simple and Compound Interests calculation. If P= Principle amount invested r= annual rate of interest ( For 8% annual rate of interest r=8) t= time period in years. Then, \(Simple Interest (SI) = P*r*t\) For calculation of Compound Interest calculation if A=accumulated amount (principle + all interest) Then, \(A= P*( 1 +\) \({r/100}\)\()^t\)
_________________
My mantra for cracking GMAT: Everyone has inborn talent, however those who complement it with hard work we call them 'talented'.
+1 Kudos = Thank You Dear Are you saying thank you?



Intern
Joined: 15 Jan 2015
Posts: 23

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
18 Feb 2015, 01:07
If money is invested at r percent interest, compounded annually, the amount of investment will double in approximately 70/r years. If Pat's parents invested $ 5000 in a long term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of investment 18 years later, when Pat is ready for college?
A. $20000 B. $15000 C. $12000 D. $10000 E. $9000
Amount will get doubled after (70/8) years or 8.75 years Amount after 8.75 years = 2*5000 = 10000 Amount after 17.5 years = 2*10000 = 20000
Amount after 18 years will be approx to 20000.
Answer A



VP
Status: Learning
Joined: 20 Dec 2015
Posts: 1041
Location: India
Concentration: Operations, Marketing
GPA: 3.4
WE: Engineering (Manufacturing)

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
02 Jul 2017, 04:54
Imo A To Rate of interest =8 % The amount invested doubles in 70/r=70/8 = 8.75 years approximately 9 years 5000(1+8/100)^18 now this difficult to calculate we take help from above In 9 years 5000 will become 10000 and in another 9 years it will become 20,000 Thus A is the answer.
_________________
Please give kudos if you found my answers useful



Math Expert
Joined: 02 Sep 2009
Posts: 52294

Re: If money is invested at r percent interest compounded annual
[#permalink]
Show Tags
06 Apr 2018, 03:16




Re: If money is invested at r percent interest compounded annual &nbs
[#permalink]
06 Apr 2018, 03:16






