How could I solve the compound interest questions when they ask for calculating the rate to a high power Like 17,000 * 1.0082^8 for example Is there an easy way to solve this

Shikatokika wrote:How could I solve the compound interest questions when they ask for calculating the rate to a high power Like 17,000 * 1.0082^8 for example Is there an easy way to solve this On the GMAT, you'd never be required to make such a calculation. Cheers, Brent

Hi Shikatokika, Are you working with practice materials that are asking you to perform that type of calculation? Since the GMAT will NOT ask you to do that type of work, you might be using materials that aren't appropriate for. There are plenty of quality resources to be found though, so you might want to consider your options. GMAT assassins aren't born, they're made, Rich

For official compound interest questions, see here: https://www.beatthegmat.com/compound-int ... 12277.html or here: https://www.beatthegmat.com/if-a-loan-of ... 76962.html

Thank you guys for your reply. It is true that the other one I got it from one of the online problem solving, and not from the OG, however here is the question that got me confused OG16 - PS104 Leona bought a 1 yr, $10,000 certificate of deposit that paid interest at an annual rate of 8% compounded semiannually What was the total amount of interest paid on this certificate at maturity A $10,464 B $864 C $816 D $800 E $480 So the answer was 10,000 (1+ 0.08/2) ^ 2x1 which will be 10,000 (1.04)^2 Is there a way to make such calculation easier? By elimination we shall eliminate A, D, and E But how to know whether it's B or C

Hi Shikatokika, Instead of trying to solve this problem with one 'big' calculation, you would likely find it easier to just do it in 'pieces' Since the interest is generated semi-annually, you'll calculate 4% interest after 6 months and then another 4% interest (on the new total) after then next 6 months: Start: $10,000 6 months later: $10,000 + (.04)(10,000) = $10,400 12 months later: $10,400 + (.04)(10,400) = $10,816 The question asks for the total interest earned --> $816 Final Answer: C GMAT assassins aren't born, they're made, Rich

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