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Math Expert V
Joined: 02 Sep 2009
Posts: 58340

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4 00:00

Difficulty:   35% (medium)

Question Stats: 67% (01:14) correct 33% (01:15) wrong based on 78 sessions

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If a 5-year construction project is structured to double the investment every succeeding year, approximately what percentage of the total cost was invested in the first year?

A. 12.5%
B. 10%
C. 8.25%
D. 5%
E. 3%

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Math Expert V
Joined: 02 Sep 2009
Posts: 58340

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Official Solution:

If a 5-year construction project is structured to double the investment every succeeding year, approximately what percentage of the total cost was invested in the first year?

A. 12.5%
B. 10%
C. 8.25%
D. 5%
E. 3%

Let's say we invested $10 the first year. The second year it will be$20 more, third - $40 more, fourth -$80 more, and fifth - $160 more. Now, add them: 10+20+40+80+160 = 310. So, the original investment was $$\frac{10}{310}$$ or $$\frac{1}{31}$$ or about 3%. Answer: E _________________ Intern  Joined: 14 May 2014 Posts: 39 Schools: Broad '18 (WA$)
GMAT 1: 700 Q44 V41 GPA: 3.11

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Bunuel wrote:
Official Solution:

If a 5-year construction project is structured to double the investment every succeeding year, approximately what percentage of the total cost was invested in the first year?

A. 12.5%
B. 10%
C. 8.25%
D. 5%
E. 3%

Let's say we invested $10 the first year. The second year it will be$20 more, third - $40 more, fourth -$80 more, and fifth - $160 more. Now, add them: 10+20+40+80+160 = 310. So, the original investment was $$\frac{10}{310}$$ or $$\frac{1}{31}$$ or about 3%. Answer: E hi..! this question could be interpreted as follows also..? say first year we invested 10$
so 2nd year : 20 $Now 3rd year we invest double the invested amount : so it could be 2*(10+20) = 60$.

i assumed it this way, solved it and then saw that there were no matching choices. So had to do it again in the above mentioned manner.. Current Student Joined: 28 Jul 2014
Posts: 13

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I interpreted it as follows: if A is initial investment, then after 5 years, this will compound to A*2^5. i.e. doubling every year for 5 years. Then we have A/A*2^5 = 1/32 = 3.125% ~ = 3%
Intern  Joined: 18 Oct 2015
Posts: 2
GMAT 1: 720 Q47 V41 GPA: 3.98

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4
I think this is a poor-quality question and I agree with explanation. the question is ambiguous and it is difficult to understand what is asked.
Intern  B
Joined: 17 May 2016
Posts: 27
GMAT 1: 740 Q46 V46 Show Tags

As the investment is doubled every year, if you want to get the initial amount you have to divide final by 2, and repeat 5 times

$$100 * 2^-5$$

$$\frac{100}{2^5}$$

$$\frac{100}{32}$$

more or less 3%
Intern  Joined: 20 Jul 2016
Posts: 2

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I think this is a poor quality question. The wording makes it sound as though every year it is providing a return of double the amount invested. Plus, "cost" and "investment" are used interchangeably. Good concept, bad wording.
Current Student B
Joined: 23 Nov 2016
Posts: 70
Location: United States (MN)
GMAT 1: 760 Q50 V42 GPA: 3.51

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riyazgilani wrote:
Bunuel wrote:
Official Solution:

If a 5-year construction project is structured to double the investment every succeeding year, approximately what percentage of the total cost was invested in the first year?

A. 12.5%
B. 10%
C. 8.25%
D. 5%
E. 3%

Let's say we invested $10 the first year. The second year it will be$20 more, third - $40 more, fourth -$80 more, and fifth - $160 more. Now, add them: 10+20+40+80+160 = 310. So, the original investment was $$\frac{10}{310}$$ or $$\frac{1}{31}$$ or about 3%. Answer: E hi..! this question could be interpreted as follows also..? say first year we invested 10$
so 2nd year : 20 $Now 3rd year we invest double the invested amount : so it could be 2*(10+20) = 60$.

i assumed it this way, solved it and then saw that there were no matching choices. So had to do it again in the above mentioned manner.. Although I got this correct, I agree with this dude. It would be clearer if the question stated something along the lines of, "Over a 5 year period, if the amount invested in a construction project each year is double the previous year's amount, approximately what percentage of the total cost was invested in the first year?"
Intern  B
Joined: 07 Sep 2016
Posts: 1
Location: India
GMAT 1: 660 Q44 V36 GPA: 3.44

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I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. I am not sure if the terms such as, 'cost' & 'investment' are interchangeable.
Intern  B
Joined: 07 May 2017
Posts: 3
GMAT 1: 660 Q49 V33 GMAT 2: 710 Q49 V38 GPA: 3.6
WE: Information Technology (Consulting)

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I think this is a poor-quality question and I agree with explanation. The language used is difficult to understand.
Manager  S
Joined: 17 Jan 2017
Posts: 60

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I got it right but awkward question. Is every year a "succeeding year"? :/
Intern  B
Joined: 09 Jan 2018
Posts: 21
Location: Australia
Schools: Booth '21 (II)
GRE 1: Q164 V162 GRE 2: Q164 V162 GPA: 3.63

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I think this is a poor-quality question and I agree with explanation. While the concept testing is nice, the question wording is very unclear.
Intern  B
Joined: 12 Aug 2017
Posts: 6

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This is how I solved the question algebraically.

Let the initial investment in year 1 be X. We are told that the investment doubles every succeeding year for 5 years. This means:

1st year = x
2nd year = 2*X = 2x
3rd year = 2* (2x) = 4x
4th year = 2*4x = 8x
5th year = 2*8x = 16x

Sum up all the investments from year 1 to year 5. x + 2x + 4x + 8x + 16x = 31x
The initial investment/ total investment = x/31x = 1/31 = ~3% Choice E
Intern  B
Joined: 27 Feb 2018
Posts: 30
Location: United States (OR)
GMAT 1: 700 Q44 V41 GMAT 2: 700 Q44 V41 GMAT 3: 760 Q49 V47 GPA: 3.25
WE: Consulting (Computer Software)

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I think this is a poor-quality question. I think the concept tested here is good but the wording execution is poor.

I interpreted doubling the investment as doubling the TOTAL investment in the project, not the amount ADDED is double the previous amount (the problem statement doesn't indicate an incremental amount added, just that the investment is doubled).

My interpretation would have a year 1 total investment of $10 leading to a year 2 total investment of$20 and so on. I started with a total investment of $100 in year 5 and worked backwards to get a$6.125 year 1 value, which was approximately 5%, answer D.
Intern  B
Joined: 02 Feb 2018
Posts: 31

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ajbrown99 wrote:
I think this is a poor quality question. The wording makes it sound as though every year it is providing a return of double the amount invested. Plus, "cost" and "investment" are used interchangeably. Good concept, bad wording.

100% agree
Senior RC Moderator V
Joined: 02 Nov 2016
Posts: 4089
GPA: 3.39

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Totally Agreed that its a poor quality question. I have practiced almost 1500+ official quant questions and never seen such a single question. Didn't understand what the question is demanding, the use of the language is ambiguous.

Hoping for improvement.
_________________ M07-21   [#permalink] 17 Nov 2018, 08:47
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