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The amount of an investment will double in approximately 70/ p years,

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The amount of an investment will double in approximately 70/ p years,  [#permalink]

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27 Dec 2015, 09:53
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The amount of an investment will double in approximately 70/ p years, where p is the percent interest, compounded annually. If Thelma invests $40,000 in a long-term CD that pays 5 percent interest, compounded annually, what will be the approximate total value of the investment when Thelma is ready to retire 42 years later? A.$ 280,000
B. $320,000 C.$ 360,000
D. $450,000 E.$ 540,000

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Re: The amount of an investment will double in approximately 70/ p years,  [#permalink]

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27 Dec 2015, 09:59
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The amount of an investment will double in approximately 70/ p years, where p is the percent interest, compounded annually. If Thelma invests $40,000 in a long-term CD that pays 5 percent interest, compounded annually, what will be the approximate total value of the investment when Thelma is ready to retire 42 years later? The investment gets doubled in 70/p years. Therefore, the investment gets doubled in 70/5= every 14 years. After 42 years, the investment will get doubled 42/14= 3 times. So the amount invested will get doubled thrice. So, 40000 *2 = 80000 80000*2 = 160000 160000*2 = 320000 Hence, the answer is B. _________________ Kindly press the Kudos to appreciate my post !! EMPOWERgmat Instructor Status: GMAT Assassin/Co-Founder Affiliations: EMPOWERgmat Joined: 19 Dec 2014 Posts: 12411 Location: United States (CA) GMAT 1: 800 Q51 V49 GRE 1: Q170 V170 Re: The amount of an investment will double in approximately 70/ p years, [#permalink] Show Tags 30 Dec 2015, 11:35 1 Hi All, This question is a 'lift' of a question in the recent OGs: PS Question #141 (page 172) in the OG13 and GMAT2015 PS Question #166 (page 166) in the GMAT 2016 GMAT assassins aren't born, they're made, Rich _________________ 760+: Learn What GMAT Assassins Do to Score at the Highest Levels Contact Rich at: Rich.C@empowergmat.com Rich Cohen Co-Founder & GMAT Assassin Special Offer: Save$75 + GMAT Club Tests Free
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The amount of an investment will double in approximately 70/ p years,  [#permalink]

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25 Dec 2017, 13:56
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Bunuel wrote:
The amount of an investment will double in approximately 70/ p years, where p is the percent interest, compounded annually. If Thelma invests $40,000 in a long-term CD that pays 5 percent interest, compounded annually, what will be the approximate total value of the investment when Thelma is ready to retire 42 years later? A.$ 280,000
B. $320,000 C.$ 360,000
D. $450,000 E.$ 540,000

This question can be done in simple steps.

1) Find the number of years investment will double in this case. Use the formula, with interest rate, p = 5 percent

Doubling = $$\frac{70}{p}$$ years

Doubling = $$\frac{70}{5}$$years = 14 years to double

2) In the longer span of 42 years, how many times will investment double?

$$\frac{TotalYears}{YrsToDouble}$$ = # of times the money will double

$$\frac{42}{14}=$$ 3 times that the money will double

3) Total at the end?

Money doubles (*2) three times: $$(2)(2)(2) = 2^3$$
$$(40,000 * 2^3) = (40,000*8) = 320,000$$

OR, very simply:

$40,000 Start +14 yrs =$80,000
+14 yrs =
$160,000 +14 yrs =$320,000 End

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The amount of an investment will double in approximately 70/ p years, &nbs [#permalink] 25 Dec 2017, 13:56
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