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Register now and save up to $200 Available with Beat the GMAT members only code • Free Trial & Practice Exam BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Free Veritas GMAT Class Experience Lesson 1 Live Free Available with Beat the GMAT members only code • Get 300+ Practice Questions 25 Video lessons and 6 Webinars for FREE Available with Beat the GMAT members only code • 5 Day FREE Trial Study Smarter, Not Harder Available with Beat the GMAT members only code ## Interest problem tagged by: Brent@GMATPrepNow This topic has 4 expert replies and 2 member replies Rastis Master | Next Rank: 500 Posts Joined 21 Sep 2011 Posted: 183 messages Followed by: 2 members Thanked: 6 times Target GMAT Score: 700 GMAT Score: 500 #### Interest problem Mon Dec 08, 2014 12:41 pm Elapsed Time: 00:00 • Lap #[LAPCOUNT] ([LAPTIME]) An investment a d dollars at k percent simple annual interest yields$600 interest over a 2-year period. In terms of d, what dollar amount invested at the same rate will yield $2,400 over a 3-year period? a) 2d/3 b) 3d/4 c) 4d/3 d) 3d/2 e) 8d/3 Need free GMAT or MBA advice from an expert? Register for Beat The GMAT now and post your question in these forums! ### GMAT/MBA Expert GMATGuruNY GMAT Instructor Joined 25 May 2010 Posted: 13497 messages Followed by: 1791 members Thanked: 12991 times GMAT Score: 790 Mon Dec 08, 2014 12:49 pm Quote: An investment of d dollars at k percent simple interest yields$600 interest over a 2-year period. In terms of d, what dollar amount invested at the same rate will yield $2,400 interest over a 3-year period? A. 2d/3 B. 3d/4 C. 4d/3 D. 3d/2 E. 8d/3 The interest rate is irrelevant. This problem is really about a PROPORTION.$d invested over 2 years is equivalent to $600 in interest.$x invested over 3 years must be equivalent to $2400 in interest. Thus: (d * 2)/600 = (x * 3)/2400 d/300 = x/800 d/3 = x/8 x = (8d)/3. The correct answer is E. _________________ Mitch Hunt GMAT Private Tutor GMATGuruNY@gmail.com If you find one of my posts helpful, please take a moment to click on the "Thank" icon. Available for tutoring in NYC and long-distance. For more information, please email me at GMATGuruNY@gmail.com. Free GMAT Practice Test How can you improve your test score if you don't know your baseline score? Take a free online practice exam. Get started on achieving your dream score today! Sign up now. ### GMAT/MBA Expert GMATGuruNY GMAT Instructor Joined 25 May 2010 Posted: 13497 messages Followed by: 1791 members Thanked: 12991 times GMAT Score: 790 Mon Dec 08, 2014 12:49 pm Quote: An investment of d dollars at k percent simple annual interest yields$600 interest over a 2-year period. In terms of d, what dollar amount invested at the same rate will yield $2,400 interest over a 3-year period 2d/3 3d/4 4d/3 3d/2 8d/3 An alternate approach is to PLUG AND CHUG: 1. Choose a good value for k. 2. Use the value of k to determine the value of d. 3. Answer the question and get a target. 4. Determine which answer choice yields the target. Step 1: Let the interest rate = 100%: k=100. Step 2: Since$600 is earned over 2 years, $300 is earned each year. To earn$300 at an interest rate of 100%, the amount invested = $300: d=300. Step 3: To earn$2400 over 3 years, $800 must be earned each year. To earn$800 at an interest rate of 100%, the amount invested = 800.
This is the target.

Step 4:
Now plug d=300 into the answers to see which yields the target of 800.
A quick scan of the answers reveals that only E works:
8d/3 = 8(300)/3 = 800.

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Rastis Master | Next Rank: 500 Posts
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Mon Dec 08, 2014 1:00 pm
That makes more sense. I was trying to use the interest rate formula and ended up guessing and moving on. Thanks!

### GMAT/MBA Expert

Brent@GMATPrepNow GMAT Instructor
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Mon Dec 08, 2014 5:01 pm
Quote:
"An investment of d dollars at k percent simple annual interest yields $600 over a 2-year period. In terms of d, what dollar amount invested at the same rate will yield$2,400 interest over a 3-year period?

(A) 2d/3
(B) 3d/4
(C) 4d/3
(D) 3d/2
(E) 8d/3

An investment of d dollars at k percent simple annual interest yields $600 over a 2-year period. In other words, an investment of d dollars yields$300 in interest each year.

What dollar amount invested at the same rate will yield $2,400 interest over a 3-year period? In other words, how much money must we invest to earn$800 in interest EACH YEAR?

If a d dollar investment yields $300 in interest EACH YEAR, then: - a 2d dollar investment would yield$600 (2 times $300) in interest EACH YEAR - a 3d dollar investment would yield$900 (3 times $300) in interest EACH YEAR - a 4d dollar investment would yield$1200 (4 times $300) in interest EACH YEAR - etc. From here there are two approaches. APPROACH #1 We want the ANNUAL interest to be$800.
This means we must invest an amount that is BETWEEN 2d dollars and 3d dollars [since $800 is BETWEEN$600 and $900]. When we check the answer choices, only E, which can be written as (8/3)d, is BETWEEN 2d dollars and 3d So, the correct answer must be E APPROACH #2 To increase the ANNUAL interest from$300 to $800, we must invest 800/300 TIMES as much money. 800/300 = 8/3, so we must invest (8/3)d dollars [aka 8d/3 dollars] Answer = E Cheers, Brent _________________ Brent Hanneson â€“ Founder of GMATPrepNow.com Use our video course along with Check out the online reviews of our course Come see all of our free resources GMAT Prep Now's comprehensive video course can be used in conjunction with Beat The GMATâ€™s FREE 60-Day Study Guide and reach your target score in 2 months! Mathsbuddy Master | Next Rank: 500 Posts Joined 08 Nov 2013 Posted: 447 messages Followed by: 1 members Thanked: 25 times Fri Dec 19, 2014 6:42 am d x k/100 x 2 = 600 So k/100 =300/d e x k/100 x 3 = 2400 e x 300/d x 3 = 2400 e x 3/d = 8 e = 8d/3 ### GMAT/MBA Expert Matt@VeritasPrep GMAT Instructor Joined 12 Sep 2012 Posted: 2600 messages Followed by: 113 members Thanked: 596 times Target GMAT Score: V51 GMAT Score: 780 Mon Dec 22, 2014 12:47 pm Here's another pretty straightforward approach.$d at k% is currently giving us $300 a year. To get$800 a year, we'd need to multiply our principle by 8/3, since 300 * (8/3) = 800.

Hence we multiply d by (8/3), giving us (8/3)d, and we're done!

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