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17 Oct 2016, 21:17
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Difficulty:

15% (low)

Question Stats:

81% (00:42) correct 19% (00:50) wrong based on 63 sessions

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Johnny borrows $30,000 from Tony at 2% daily interest compounded daily. How much does Johnny owe Tony after 8 weeks? a) 30000*0.02^56 b) 30000*1.12 c) 30000*2.12 d) 30000*1.02^56 e) (30000*1.02)^56 Please assist with above problem. [Reveal] Spoiler: OA Kudos [?]: 92 [0], given: 320 Board of Directors Status: QA & VA Forum Moderator Joined: 11 Jun 2011 Posts: 3115 Kudos [?]: 1150 [1], given: 327 Location: India GPA: 3.5 WE: Business Development (Commercial Banking) Re: Jonny borrows$30,000 from Tony at 2% daily interest compounded daily. [#permalink]

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18 Oct 2016, 06:59
1
KUDOS
alanforde800Maximus wrote:
Johnny borrows $30,000 from Tony at 2% daily interest compounded daily. How much does Johnny owe Tony after 8 weeks? a) 30000*0.02^56 b) 30000*1.12 c) 30000*2.12 d) 30000*1.02^56 e) (30000*1.02)^56 Please assist with above problem. $$A =$$ $$P(1+\frac{r}{100})^n$$ So, $$A =$$ $$30000(1+\frac{2}{100})^{7*8}$$ So, $$A =$$ $$30000(1.02)^{56}$$ Hence answer will be (D) $$A =$$ $$30000(1.02)^{56}$$ _________________ Thanks and Regards Abhishek.... PLEASE FOLLOW THE RULES FOR POSTING IN QA AND VA FORUM AND USE SEARCH FUNCTION BEFORE POSTING NEW QUESTIONS How to use Search Function in GMAT Club | Rules for Posting in QA forum | Writing Mathematical Formulas |Rules for Posting in VA forum | Request Expert's Reply ( VA Forum Only ) Kudos [?]: 1150 [1], given: 327 EMPOWERgmat Instructor Status: GMAT Assassin/Co-Founder Affiliations: EMPOWERgmat Joined: 19 Dec 2014 Posts: 10412 Kudos [?]: 3694 [1], given: 173 Location: United States (CA) GMAT 1: 800 Q51 V49 GRE 1: 340 Q170 V170 Re: Jonny borrows$30,000 from Tony at 2% daily interest compounded daily. [#permalink]

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28 Nov 2017, 12:47
1
KUDOS
Expert's post
Hi All,

This question is a variation on a typical Compound Interest question. Thus, we'll need the Compound Interest Formula:

Total = (Principal)(1 + R)^T where R is the interest Rate and T is the number of 'time periods'

In this question, the variables are:
Principal = $30,000 R = .02/day T = 8 weeks = 8(7) = 56 days Thus, the equation becomes: (30,000)(1.02)^56 Final Answer: [Reveal] Spoiler: D GMAT assassins aren't born, they're made, Rich _________________ 760+: Learn What GMAT Assassins Do to Score at the Highest Levels Contact Rich at: Rich.C@empowergmat.com # Rich Cohen Co-Founder & GMAT Assassin Special Offer: Save$75 + GMAT Club Tests Free
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Kudos [?]: 3694 [1], given: 173