GMAT TIGER wrote:
arjtryarjtry wrote:
On a certain date, Pat invested $10,000 at x percent annual interest, compounded annually. If the total value of the investment plus interest at the end of 12 years will be $40,000, in how many years, the total value of the investment plus interest will increase to $80,000?
A. 15
B. 16
C. 18
D. 20
E. 24
for compound interest problems, when the time is large, then how does one approach???
dont just give the steps...
also mention, for variations in the problems, how does one approach???
your second post blocked my post.
i cannot do it without calculator or computer and also beleieve this is not real gmat type question cuz its very difficult to get the value without those machines.
if i were to choose during the test, would go for 18 or 20. probably 18 cuz it wont take too long to get the value doubled....
I found a method: Rule of 72.
Given an x% return, it takes 10,000 to quadralope 12 years.
So according to the rule: 72/x is the no of years 10,000.00 took to double 20,000.00.
Again, 20,000.00 took to double 40,000.00 same (72/x) no of years.
72/x+ 72/x = 12
x = 12% (though rate here is not very much required).
Again, 40,000.00 takes the same (72/x) no of years to double 80,000.00.
72/x = 6 years.
So altogather:
10,000 - 20,000 = 6 years
20,000 - 40,000 = 6 years
40,000 - 80,000 = 6 years
total 18 years.