percent, interest and word problems

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BTGmoderatorRO: Moderator; Posts: 772; Joined: Wed Aug 30, 2017 6:29 pm; Followed by:6 members

percent, interest and word problems

by BTGmoderatorRO » Sun Oct 15, 2017 9:19 am

Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional compound interest of $4800, for how many more years should she keep her money invested?
A. 7 years
B. 14 years
C. 21 years
D. 24 years
E. 30 years
What is the correct solution to this to get the correct answer? How will i formulate the formula in this?
QA is b

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Source: Beat The GMAT — Problem Solving | Sun Oct 15, 2017 9:19 am

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by DavidG@VeritasPrep » Sun Oct 15, 2017 12:01 pm

Roland2rule wrote:Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional compound interest of $4800, for how many more years should she keep her money invested?
A. 7 years
B. 14 years
C. 21 years
D. 24 years
E. 30 years
What is the correct solution to this to get the correct answer? How will i formulate the formula in this?
QA is b

200% of $200 is $400, so if her investment increased by $400, her investment will be worth $600 in 7 year. Put another way, her investment is tripling every 7years.

So in 7 more years, she'll have 600*3 = $1800.
And in 14 years, she'll have have 1800*3 = 5400. Well, if she's gone from $600 to $5400, she's earned 5400 - 600 = $4800 more interest, so our answer is B.
.

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8085; Joined: Sat Apr 25, 2015 10:56 am; Location: Los Angeles, CA; Thanked: 43 times; Followed by:29 members

by Scott@TargetTestPrep » Wed Nov 27, 2019 10:48 am

BTGmoderatorRO wrote:Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional compound interest of $4800, for how many more years should she keep her money invested?
A. 7 years
B. 14 years
C. 21 years
D. 24 years
E. 30 years

What is the correct solution to this to get the correct answer? How will i formulate the formula in this?
QA is b

We see that the original investment actually triples from $200 to $600 in 7 years . So it will triple again in another 7 years, from $600 to $1800. It will again triple in 7 more years, from $1800 to $5400. At this point, we see that the earning in additional interest is exactly 5400 - 600 = $4800. Therefore, it takes 7 + 7 = 14 additional years to earn $4800 after the investment accumulated to $600.

Answer: B

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