Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 26 May 2017, 19:02

### 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

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# John deposited $10,000 to open a new savings account that  post reply Question banks Downloads My Bookmarks Reviews Important topics Author Message Manager Joined: 23 Jan 2008 Posts: 108 Followers: 2 Kudos [?]: 82 [0], given: 0 John deposited$10,000 to open a new savings account that [#permalink]

### Show Tags

01 Feb 2008, 14:08
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened? 1.$10,000
2. $10,101 3.$10,200
4. $10,201 5.$10,400
CEO
Joined: 21 Jan 2007
Posts: 2745
Location: New York City
Followers: 11

Kudos [?]: 942 [0], given: 4

### Show Tags

01 Feb 2008, 14:12
blog wrote:
John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened? 1.$10,000
2. $10,101 3.$10,200
4. $10,201 5.$10,400

FV = PV ( 1 + i/n)^nt
FV = 10000(1+ .04/4)^2(1)
4
_________________

You tried your best and you failed miserably. The lesson is 'never try'. -Homer Simpson

CEO
Joined: 29 Mar 2007
Posts: 2562
Followers: 21

Kudos [?]: 453 [0], given: 0

### Show Tags

01 Feb 2008, 14:28
blog wrote:
John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened? 1.$10,000
2. $10,101 3.$10,200
4. $10,201 5.$10,400

I=P(1+r/n)^nt --> I=10000(1+.04/4)^4(1/2) ---> 10000(1+.01)^2 -->

1.01*1.01 = 1.021 so 10000*1.02 --> 10201

Please note this is a problem in which you have to pay attention to the answer choices. C and D are very close so you can't really afford to do any aproximation here.
Senior Manager
Joined: 26 Jan 2008
Posts: 263
Followers: 4

Kudos [?]: 109 [0], given: 16

### Show Tags

01 Feb 2008, 14:48
blog wrote:
John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened? 1.$10,000
2. $10,101 3.$10,200
4. $10,201 5.$10,400

(D)

original amount, P = 10000
4% annual compound interest = 1% quarterly compound interest
After 1 quarter, P = 10000 + (1% of 10000) = 10100 [This is the new principal.. since interest is compounded quarterly]
After 2 quarters, P = 10100 + (1% of 10100) = 10201
_________________
Re: john   [#permalink] 01 Feb 2008, 14:48
Display posts from previous: Sort by

# John deposited \$10,000 to open a new savings account that

 post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.