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.
Jul 1011:00 AM PDT
-11:00 AM PDT
In our conversation, Kishore talks about how strategically he used data analytics to identify high impact areas to focus on as well as his early morning study routine (3 AM prep!) that optimized his GMAT preparation.- Jun 30
08:00 AM PDT
-11:59 PM PDT
Join us June 30th for 2 weeks of GMAT questions (just 8 per day) to help with your prep and to compete with your fellow GMAT Clubbers for a chance to win a prize fund of $30,000 for you and your team-mates! 
Jul 0901:00 PM EDT
-02:00 PM EDT
More Target Test Prep students are earning 100th percentile GMAT scores. Don’t settle for less when the Target Test Prep course gives you everything you need to score high on the GMAT. Start your 5-day free trial today.
Jul 1206:30 AM PDT
-08:30 AM PDT
Join our webinar to master GMAT RC Main Point Questions! Learn effective strategies to decipher passage themes and purposes. Senior Verbal Expert- Sunita Singhvi will equip you with tools to navigate complexities and avoid common traps set by the GMAT.
Jul 1211:00 AM IST
-01:00 PM IST
Attend this session to learn how to Deconstruct arguments, Pre-Think Author’s Assumptions, and apply Negation Test.
Jul 1311:00 AM EDT
-12:30 PM EDT
Looking for your GMAT motivation to break through the score plateau? Pragati improved her score by massive 160 points with strategic guidance and hard-work! Find out how personalized mentorship and a strong mindset can turn GMAT struggles into success.
Jul 1508:00 PM PDT
-09:00 PM PDT
Full-length FE mock with insightful analytics, weakness diagnosis, and video explanations!
Jul 1611:00 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.
26 Oct 2022, 09:15
Kudos
Bookmarks
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
54% (02:57) correct
46%
(02:45)
wrong
based on 165
sessions
History
Date
Time
Result
Not Attempted Yet
Warren invested $5,000 for two years at a simple annual interest rate of x percent and invested $3,000 for two years at an annual interest rate of 8 percent compounded quarterly. If after 2 years both investments earned the same amount in interest, what is the approximate value of x?
A. 1%
B. 2.5%
C. 5%
D. 7.5%
E. 10%
A. 1%
B. 2.5%
C. 5%
D. 7.5%
E. 10%
|
Experience a GMAT Club Test Questions
Yes, you've landed on a GMAT Club Tests question
Craving more? Unlock our full suite of GMAT Club Tests here
Want to experience more? Get a taste of our tests with our free trial today
Rise to the challenge with GMAT Club Tests. Happy practicing!
27 Oct 2022, 07:24
Kudos
Bookmarks
Bunuel
Warren invested $5,000 for two years at a simple annual interest rate of x percent and invested $3,000 for two years at an annual interest rate of 8 percent compounded quarterly. If after 2 years both investments earned the same amount in interest, what is the approximate value of x?
A. 1%
B. 2.5%
C. 5%
D. 7.5%
E. 10%
A. 1%
B. 2.5%
C. 5%
D. 7.5%
E. 10%
|
GMAT Club Official Explanation:
The answer choices are well spread out and we are asked to find the approximate value of x, so let's simplify and approximate.
If the interest of 8% on $3,000 were NOT compounded and instead we had a simple interest, then after 2 years interest earned would simply be 0.08*3000*2 = $480. Since the interest is compounded quarterly (4 times per year), then there would be interest earned on interest and thus the the actual interest earned would be more than $480 but not by much. Say it's $500 (FYI actually the value, rounded to the nearest integer, is $515).
What should be the value of x so that $5,000 to earn $500 in 2 years? $500 in 2 years means $250 in a year, which is 5% of $5,000.
Answer: C.
If we not have done this, then we'd have to solve/approximate x from the equation below:
- \(5,000*\frac{x}{100}*2 = 3,000*(1+\frac{0.08}{4})^{(4*2)} - 3,000\)
This gives \(x \approx 5.15%\).
General Discussion
26 Oct 2022, 14:38
Kudos
Bookmarks
Hi Bunuel - Can you check this question and clarify the question below the quoted text.
$3000 when invested for 2 years at the rate of 8% per year (compounded quarterly) will yield approx. $3500 at the end of second year. The principle value of the investment in simple interest is $5000.
Does this mean the interest values are same at the end of two years? The amount (principle + interest) at the end of two years cannot be the same unless the investment that's invested in simple interest deprecates ?
Am I missing anything ?
$3000 when invested for 2 years at the rate of 8% per year (compounded quarterly) will yield approx. $3500 at the end of second year. The principle value of the investment in simple interest is $5000.
Quote:
What is the approximate value of x, if both investments yield the same amount after 2 years
Does this mean the interest values are same at the end of two years? The amount (principle + interest) at the end of two years cannot be the same unless the investment that's invested in simple interest deprecates ?
Am I missing anything ?
