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Re: Which of the following represents the profit from the investment of x [#permalink]
After 3 years the interest earned including the initial investment would be equal to \(x (1+n/100)^3\). So, the interest earned = \(x (1+n/100)^3 - x\). Ans (D).
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Re: Which of the following represents the profit from the investment of x [#permalink]
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Bunuel wrote:
Which of the following represents the profit from the investment of x dollars at n percent compound annual interest for 3 years?

A. x(1 + 3n/100) – x
B. x(1 + n)^3/100 – x
C. 3x(1 + n/100)^2 – x
D. x(1 + n/100)^3 – x
E. x(1 + 3n/100)^3 – x


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Formula for compound interest= Principal{(1+r/100)^n-1}
Using the formula above, profit/interest=x(1+n/100)^3-x
Answer D
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Re: Which of the following represents the profit from the investment of x [#permalink]
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Bunuel wrote:
Which of the following represents the profit from the investment of x dollars at n percent compound annual interest for 3 years?

A. x(1 + 3n/100) – x
B. x(1 + n)^3/100 – x
C. 3x(1 + n/100)^2 – x
D. x(1 + n/100)^3 – x
E. x(1 + 3n/100)^3 – x


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800score Official Solution:

Compound interest is annually added to the principal sum. Therefore we can calculate the profit by deducting the original investment amount from the principal sum that we get in three years.

The principal sum increases by (1 + n/100) times each year. Therefore, in three years it increases by (1 + n/100)³ times. Since the original principal sum is x, then the profit is x(1 + n/100)³ – x.

The correct answer is choice (D).
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Re: Which of the following represents the profit from the investment of x [#permalink]
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Re: Which of the following represents the profit from the investment of x [#permalink]
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