Events & Promotions
|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Apr 2512:30 AM EDT
-01:30 AM EDT
At one point, she believed GMAT wasn’t for her. After scoring 595, self-doubt crept in and she questioned her potential. But instead of quitting, she made the right strategic changes. The result? A remarkable comeback to 695. Check out how Saakshi did it.
Apr 2601:30 AM EDT
-02:30 AM EDT
Learn how Keshav, a Chartered Accountant, scored an impressive 705 on GMAT in just 30 days with GMATWhiz's expert guidance. In this video, he shares preparation tips and strategies that worked for him, including the mock, time management, and more.
Apr 2610:00 AM EDT
-11:00 AM EDT
The Target Test Prep course represents a quantum leap forward in GMAT preparation, a radical reinterpretation of the way that students should study. Try before you buy with a 5-day, full-access trial of the course for FREE!
Apr 2711:00 AM EDT
-12:00 PM EDT
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors
Apr 2808:00 AM PDT
-11:00 AM PDT
Whether you are just beginning your MBA journey or fine-tuning your path to a 700+ score, GMAT Day is designed to give you a competitive edge.
May 0111:00 AM PDT
-12:00 PM PDT
Free- full-length test + 15 concept videos + 150+ short videos + study plan!
03 Apr 2021, 06:00
Kudos
Bookmarks
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
85%
(hard)
Question Stats:
52% (02:18) correct
48%
(02:30)
wrong
based on 166
sessions
History
Date
Time
Result
Not Attempted Yet
Michelle deposited a certain sum of money in a savings account on July 1st, 2007. She earns an 8% interest compounded semiannually. The sum of money in the account on December 31st, 2009 is approximately what percent of the initial deposit?
A. 117%
B. 120%
C. 121%
D. 135%
E. 140%
A. 117%
B. 120%
C. 121%
D. 135%
E. 140%
10 Apr 2021, 02:00
Kudos
Bookmarks
Bunuel
Since Michelle earns 8% interest compounded semiannually, then she earns 4% interest every 6 months.
Now, the simple interest earned in 5 periods (30 months = 5*6 months) would be 4%*5=20%. But, since the interest is compounded every 6 months, then there would be interest earned on interest (very small amount) thus the actual interest earned would be a little bit more than 20%, only answer choice C fits.
Answer: C.
Similar questions to practice:
https://gmatclub.com/forum/john-deposite ... 35825.html
https://gmatclub.com/forum/on-the-first- ... 28825.html
https://gmatclub.com/forum/marcus-deposi ... 28395.html
https://gmatclub.com/forum/jolene-entere ... 27308.html
https://gmatclub.com/forum/alex-deposite ... 26459.html
Theory:
https://gmatclub.com/forum/math-number-t ... 91708.html
Hope it helps.
General Discussion
10 Apr 2021, 00:43
Kudos
Bookmarks
Bunuel
Formula for compound interest:
Final value = initial value * \((1 + \frac{p}{c})^{t*c}\), where p = yearly interest, c = number of payments per year, t = number of years
Let's Test it using a simple initial value.
Let the initial value be 100.
p = 8% = \(\frac{8}{100}\)
c = 2 (semianually = twice per year)
t would be a fraction, but let's view it this way:
July - Dec. 2007: 1 payment
2008: 2 payments
2009: 2 payments
Total: 5 payments --> t*c = 5
Let's plug it into the equation:
Final value = \(100 * (1 + \frac{8}{2*100})^{5}\) = \(100 * (1 + \frac{4}{100})^{5}\) = \(100 * 1.04^5\)
After 1st payment: 100 * 1,04 = 104
After 2nd payment: 104 * 1,04 \(\approx\) 108
After 3rd payment: 108 * 1,04 \(\approx\) 112
After 4th payment: 112 * 1,04 \(\approx\) 116
After 5th payment: 116 * 1,04 \(\approx\) 120
Since we added 4 after each payment, we "ignored" the values after decimal due to simplification.
Therefore, the final value needs to be a bit bigger than 120.
The answer that fits best is Answer C: 121%
Does anyone have a better way to handle such percent-values with exponents?
I think I lost some valuable time in this step. There must be an easier way.
Thank you in advance!!
Kudos are appreciated
