It is currently Tue Apr 23, 2019 7:16 am

 All times are UTC - 5 hours [ DST ]

 Page 1 of 1 [ 2 posts ]
 Print view Previous topic | Next topic
Author Message
 Post subject: GMAT PercentagePosted: Sat Nov 03, 2012 6:43 am

Joined: Mon Nov 26, 2012 5:39 pm
Posts: 11
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

(D) 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).
----------
I'm confused by your answer. You are told that the investment increases by n%, which is n/100. If we were told that the investment increases by n, then I can understand choosing D as the answer. But as we are already given n as a % (lets say n = 8%, so .08), why would we need to put it over 100 again, as in answer D?

Top

 Post subject: Re: GMAT PercentagePosted: Sat Nov 03, 2012 6:53 am

Joined: Sun May 30, 2010 2:23 am
Posts: 498

Top

 Display posts from previous: All posts1 day7 days2 weeks1 month3 months6 months1 year Sort by AuthorPost timeSubject AscendingDescending
 Page 1 of 1 [ 2 posts ]

 All times are UTC - 5 hours [ DST ]

#### Who is online

Users browsing this forum: Google [Bot] and 2 guests

 You cannot post new topics in this forumYou cannot reply to topics in this forumYou cannot edit your posts in this forumYou cannot delete your posts in this forumYou cannot post attachments in this forum

Search for:
 Jump to:  Select a forum ------------------ GMAT    GMAT: Quantitative Section (Math)    GMAT: Verbal Section    GMAT: Integrated Reasoning    GMAT: General Questions GRE    GRE: Quantitative Reasoning (Math)    GRE: Verbal Reasoning    GRE: General Questions General questions    Other questions