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Math Expert V
Joined: 02 Sep 2009
Posts: 59730
Jack deposited p dollars into a new account that earned 4 percent annu  [#permalink]

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Difficulty:   45% (medium)

Question Stats: 69% (02:18) correct 31% (03:27) wrong based on 13 sessions

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Jack deposited p dollars into a new account that earned 4 percent annual interest compounded annually. A year later he deposited additional p dollars in the account. If there were no other transactions and if the account showed q dollars at the end of the two years, which of the following expresses p in terms of q?

(A) q/(1 + 1.04)

(B) q/(1.04 + 1.08)

(C) q/(1.08 + 1.12)

(D) q/(1.04 + 1.04^2)

(E) q/(1.04^2 + 1.04^3)

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VP  D
Joined: 20 Jul 2017
Posts: 1148
Location: India
Concentration: Entrepreneurship, Marketing
WE: Education (Education)
Re: Jack deposited p dollars into a new account that earned 4 percent annu  [#permalink]

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Bunuel wrote:
Jack deposited p dollars into a new account that earned 4 percent annual interest compounded annually. A year later he deposited additional p dollars in the account. If there were no other transactions and if the account showed q dollars at the end of the two years, which of the following expresses p in terms of q?

(A) q/(1 + 1.04)

(B) q/(1.04 + 1.08)

(C) q/(1.08 + 1.12)

(D) q/(1.04 + 1.04^2)

(E) q/(1.04^2 + 1.04^3)

Initial amount = p
Amount after 1 year = p(1 + 4/100) = 1.04p

--> Principal Amount after 1 year = 1.04p + p

Amount after 2nd year = (1.04p + p)(1 + 4/100) = (1.04p + p)1.04 = q
--> (1.04^2 + 1.04)p = q
--> p = q/(1.04^2 + 1.04)

IMO Option D Re: Jack deposited p dollars into a new account that earned 4 percent annu   [#permalink] 14 Oct 2019, 04:47
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# Jack deposited p dollars into a new account that earned 4 percent annu  