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# Pete signed up for a 3 year investment contract that promises to pay h

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Math Expert
Joined: 02 Sep 2009
Posts: 58434
Pete signed up for a 3 year investment contract that promises to pay h  [#permalink]

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25 Sep 2019, 22:01
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Difficulty:

25% (medium)

Question Stats:

89% (02:10) correct 11% (02:35) wrong based on 19 sessions

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Pete signed up for a 3 year investment contract that promises to pay him 3%, 5% and 10% in the respective years. All interest amounts are calculated annually and are reinvested in the contract. If his initial investment was €20,000 what is the total amount of interest received by Pete at the end of the contract?

(A) €1793
(B) €3793
(C) €3973
(D) €5973
(E) €6793

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Joined: 20 Aug 2019
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Pete signed up for a 3 year investment contract that promises to pay h  [#permalink]

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26 Sep 2019, 01:24
20,000 x 1.03= 20,600
20,600 x 1.05= 21,630
21,630 x 1.10= 23,793

Interest= 23,793-20,000= 3,793

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Re: Pete signed up for a 3 year investment contract that promises to pay h  [#permalink]

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29 Sep 2019, 19:19
Bunuel wrote:
Pete signed up for a 3 year investment contract that promises to pay him 3%, 5% and 10% in the respective years. All interest amounts are calculated annually and are reinvested in the contract. If his initial investment was €20,000 what is the total amount of interest received by Pete at the end of the contract?

(A) €1793
(B) €3793
(C) €3973
(D) €5973
(E) €6793

At the end of the first year, he has 20,000 x 1.03 = 20,600 euros in the account.

At the end of the second year, he has 20,600 x 1.05 = 21,630 euros in the account.

At the end of the third year, he has 21,630 x 1.1 = 23,793 euros in the account.

Thus, the total amount of interest he received at the end of three years is 23,793 - 20,000 = 3,793 euros.

Answer: B
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Re: Pete signed up for a 3 year investment contract that promises to pay h   [#permalink] 29 Sep 2019, 19:19
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# Pete signed up for a 3 year investment contract that promises to pay h

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