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# Joe deposited \$6000 into an account. The interest was earned

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Senior Manager
Joined: 04 Aug 2008
Posts: 362
Joe deposited \$6000 into an account. The interest was earned  [#permalink]

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25 Sep 2008, 15:08
Joe deposited \$6000 into an account. The interest was earned and reinvested quartertly. The compound interest for the first 3 quarters was 125, 130 and 145 respectively. What annual rate of intereset must the account earn for the fourth wuarter in order for the total interest earned on the accound for the year to be 10 percent of the initial deposit?

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Manager
Joined: 28 Aug 2008
Posts: 94
Re: \$6000 in the bank  [#permalink]

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25 Sep 2008, 15:41
1
So we take 6000

subtract the interest amounts from Q1,2,3 = 400 from 600 (10% principle)

200= Q4 interest

6400*r*(1/4) = 200
6400r=800
r=12.5%

get it? got it? Good!
Senior Manager
Joined: 04 Aug 2008
Posts: 362
Re: \$6000 in the bank  [#permalink]

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26 Sep 2008, 13:57
great how many do u score in quant?

I learned how to solve this one using some pathethic formula but your approach is miracoulus
_________________

The one who flies is worthy. The one who is worthy flies. The one who doesn't fly isn't worthy

VP
Joined: 05 Jul 2008
Posts: 1329
Re: \$6000 in the bank  [#permalink]

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26 Sep 2008, 14:06
spiridon wrote:
great how many do u score in quant?

I learned how to solve this one using some pathethic formula but your approach is miracoulus

I agree that IM took the whole compound interest formula out of scope in his calculation. I guess the Q leads one astray by putting CI in there and toward the CI formula to do some thing. But as we saw, we dont need that.

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This is not a quality discussion. It has been retired.

If you would like to discuss this question please re-post it in the respective forum. Thank you!

To review the GMAT Club's Forums Posting Guidelines, please follow these links: Quantitative | Verbal Please note - we may remove posts that do not follow our posting guidelines. Thank you.
Re: \$6000 in the bank &nbs [#permalink] 26 Sep 2008, 14:06
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# Joe deposited \$6000 into an account. The interest was earned

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