stne wrote:
unceldolan wrote:
Interest rate: 1080/900 = 6/5 = 1.2
so you would have x * 1.2 * 1.2 = 900
900 / 1.2 = 750 (easy approach: 90/12 = 7.5) 2nd year
750 / 1.2 = 625 (same as above, make it easy: 75/12 = 6.25) 1st year.
Hence D!
Sorry couldn't get you, can you elaborate?
Bunuel can you have a look at this? I believe vips0000 has some things missing in the equation,Thank you.
For interest problems you can either use the compound interest approach, as vips did, or my approach, repeating percentages.
First, you want to know the annual interest rate. As you yield 1080 in the 4th year and 900 in the third year, you have 900 * x = 1080. Hence 1080/900 = x = 1.2
This is our interest rate, our repeating percentage.
Thus, since we know that after the interest has compunded twice, the amount of the deposit is 900, we can say that
X (original amount) * 1.2 * 1.2 = 900.
You could compute and write 1.44x = 900 but in my opinion it is easier to divide 900 by 1.2 and the result by 1.2 again.
For my computing approach:
900/1.2 looks difficult at first. BUT you can simplify this by shifting the decimal point. E.g. 900/12 = something. still too difficult. Better: 90/12 = 7.5 But since you have shifted the decimal point in the numerator one to the left and the decimal point in the denominator one to the right you have to shift the decimal point in the result two to the right. hence 7.5 -> 75 -> 750.
Then you get x * 1.2 = 750 --> x = 750/1.2. Repeat the steps above and get X!
Hope it's clearer now!
Greets