GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 22 Oct 2018, 15:55

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

The compound interest on a certain sum of money invested at a certain

Author Message
TAGS:

Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 50042
The compound interest on a certain sum of money invested at a certain  [#permalink]

Show Tags

01 Oct 2018, 22:49
00:00

Difficulty:

25% (medium)

Question Stats:

82% (00:49) correct 18% (04:58) wrong based on 11 sessions

HideShow timer Statistics

The compound interest on a certain sum of money invested at a certain rate of interest in the 2nd year and in the 3rd year was $600 and$720 respectively. What was the rate of interest at which the sum of money was invested?

(A) 12.0%
(B) 12.5%
(C) 15.0%
(D) 20.0%
(E) 25.0%

_________________
Senior PS Moderator
Joined: 26 Feb 2016
Posts: 3197
Location: India
GPA: 3.12
The compound interest on a certain sum of money invested at a certain  [#permalink]

Show Tags

02 Oct 2018, 00:01
Bunuel wrote:
The compound interest on a certain sum of money invested at a certain rate of interest in the 2nd year and in the 3rd year was $600 and$720 respectively. What was the rate of interest at which the sum of money was invested?

(A) 12.0%
(B) 12.5%
(C) 15.0%
(D) 20.0%
(E) 25.0%

Concept tested
The difference in the compound interests between any two consecutive years includes additional interest,
which is nothing but the interest calculated on the compound interest earned in the first of the consecutive
years.

In this problem, the compound interest for the amount is $600 for the second year & the interest calculated for the third year is$720. The difference in interest is $120, which is the interest earned on$600. We can
calculate the rate of interest as follows - $$\frac{120}{600} * 100 = 20%$$

Therefore, the rate of interest on which the amount was invested is 20%(Option D)
_________________

You've got what it takes, but it will take everything you've got

The compound interest on a certain sum of money invested at a certain &nbs [#permalink] 02 Oct 2018, 00:01
Display posts from previous: Sort by