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22 Dec 2015, 21:18
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Nathan took out a student loan for 1200$at 10 percent annual interest, compounded annually. If he did not repay any of the loan or interest during the first 3 years, which of the following is the closest to the amount of interest he owed for the 3 years. A. 360 B. 390 C. 400 D. 410 E. 420 [Reveal] Spoiler: OA _________________ Discipline does not mean control. Discipline means having the sense to do exactly what is needed. Kudos [?]: 62 [0], given: 26 Math Forum Moderator Joined: 02 Aug 2009 Posts: 4967 Kudos [?]: 5457 [1], given: 112 Re: Nathan took out a student loan for 1200$ at 10 percent annual interest [#permalink]

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22 Dec 2015, 21:27
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RSOHAL wrote:
Nathan took out a student loan for 1200$at 10 percent annual interest, compounded annually. If he did not repay any of the loan or interest during the first 3 years, which of the following is the closest to the amount of interest he owed for the 3 years. A. 360 B. 390 C. 400 D. 410 E. 420 a straight Qrequiring direct formulae.. when compounded annualy the final amount=P(1+ r/100)^n.. here P=1200, r=10 and n=3.. 1200(1+ 10/100)^3.. 1200*1.1^3=1597.2 interest =1597-1200=397, which is nearly 400 in the choices given ansC _________________ Absolute modulus :http://gmatclub.com/forum/absolute-modulus-a-better-understanding-210849.html#p1622372 Combination of similar and dissimilar things : http://gmatclub.com/forum/topic215915.html Kudos [?]: 5457 [1], given: 112 GMAT Club Legend Joined: 09 Sep 2013 Posts: 16723 Kudos [?]: 273 [0], given: 0 Re: Nathan took out a student loan for 1200$ at 10 percent annual interest [#permalink]

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11 May 2017, 11:36
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12 May 2017, 02:33
RSOHAL wrote:
Nathan took out a student loan for 1200$at 10 percent annual interest, compounded annually. If he did not repay any of the loan or interest during the first 3 years, which of the following is the closest to the amount of interest he owed for the 3 years. A. 360 B. 390 C. 400 D. 410 E. 420 Principal amount is : 1200 Total amount after 1st yr = 1200 x 1.1 = 1320 2nd yr = 1320 x 1,1 = 1452 3rd yr = 1452 x 1.1 = 1597.2 Amount of interest he owed after 3 years = 1597.2 - 1200 = 397.2 ....... The closest value is 400. [Reveal] Spoiler: Correct Answer C _________________ MBA Social Network : WebMaggu Appreciate by Clicking +1 Kudos ( Lets be more generous friends.) Kudos [?]: 119 [0], given: 62 Manager Status: Gmat lover Joined: 27 Mar 2017 Posts: 86 Kudos [?]: 6 [0], given: 24 Location: India Schools: IIMA , IIMA PGPX"18 GMAT 1: 710 Q49 V39 GPA: 3.91 Re: Nathan took out a student loan for 1200$ at 10 percent annual interest [#permalink]

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15 May 2017, 09:35
when compounded annualy the final amount=P(1+ r/100)^n..
here P=1200, r=10 and n=3..
1200(1+ 10/100)^3..
1200*1.1^3=1597.2

final amount - P = P(1+ r/100)^n - P = Compound Interest

1597.2-1200 = aprox (397)= aprox (400)
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Re: Nathan took out a student loan for 1200$at 10 percent annual interest [#permalink] ### Show Tags 26 May 2017, 04:26 RSOHAL wrote: Nathan took out a student loan for 1200$ at 10 percent annual interest, compounded annually. If he did not repay any of the loan or interest during the first 3 years, which of the following is the closest to the amount of interest he owed for the 3 years.

A. 360
B. 390
C. 400
D. 410
E. 420

I did it this way:
1st year's interest: 10% of 1200=120,
2nd year's interest: 10% of 1320=132, ( here, 1320= 1200 +120),
3rd year's interest: 10% of 1452= 145.2 ( 1452= 1320+132)
hence total interest= $$397.2\approx{400}$$

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Re: Nathan took out a student loan for 1200$at 10 percent annual interest [#permalink] ### Show Tags 22 Jul 2017, 06:54 Question asked approximation so it is easy Initial amount 1200 mean at year 1 end==120$(interest)
Now amount 1320 mean at year 2 end==(120+132)
now amount 1452 mean at year 3 end==(120+132+145.2)
total=397.2 close to 400
Option C

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Re: Nathan took out a student loan for 1200$at 10 percent annual interest [#permalink] ### Show Tags 12 Aug 2017, 08:22 RSOHAL wrote: Nathan took out a student loan for 1200$ at 10 percent annual interest, compounded annually. If he did not repay any of the loan or interest during the first 3 years, which of the following is the closest to the amount of interest he owed for the 3 years.

A. 360
B. 390
C. 400
D. 410
E. 420

Closer to 400 than 390.
I doubt whether these qstns do come in exam.
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