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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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New post 27 Dec 2015, 09:53
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Question Stats:

70% (01:51) correct 30% (02:34) wrong based on 122 sessions

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

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New post 30 Dec 2015, 11:35
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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

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

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New post 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

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