BREAKING: Target Test Prep releases Brand New 2026 On Demand GMAT prep course

Redeem

Target Test Prep · GMAT

Choose how you want to prepare

Learn live with an expert or move at your own pace. Every option includes the complete TTP study system.

★★★★★5.0559 reviews
GMATLiveTeach 7 seats left
Chris Peckover
NEXT LIVE COHORT

Oct 13 to Jan 7, 2027

with Chris Peckover

Schedule
Tue, Thu · 8:00 to 10:00 PM ET
Included
40 live hours + 6 months of GMAT OnDemand
  • Live instruction and real-time questions
  • Class recordings and assigned practice
View class & enroll
Limited cohort · enrollment openTarget Test Prep
EALiveTeach 5 seats left
Logan Thompson
EXECUTIVE ASSESSMENT

Sep 6 to Dec 6, 2026

with Logan Thompson

Schedule
Sun · 9:30 AM to 12:30 PM ET
Included
40 hours of live online classes plus six months of access to the complete TTP EA OnDemand course.
  • 165+ EA Score Guarantee
  • 4,100+ Quant, Verbal, and Integrated Reasoning practice questions
  • 400+ hours of in-depth video lessons
  • 3,000+ step-by-step video solutions
View EA class & enroll
Limited cohort · enrollment openTarget Test Prep
GMATOnDemand Start anytime
SELF-PACED MASTERCLASS

Target Test Prep GMAT OnDemand

Complete access from day one. Study on your schedule.

715+ score guarantee
$0to start then $127/mo
  • Personalized study plan and analytics
  • Thousands of lessons and practice questions
Start free 5-day trial
Read 559 reviewsTarget Test Prep

Compare the format, schedule, and included access before enrolling. Prices and seat counts shown reflect the supplied offer details.

Compound interest

Expert replies
Post new topic Post Reply
Previous Topic Next Topic
Master | Next Rank: 500 Posts
Posts: 116
Joined: Tue Mar 31, 2009 10:50 amFollowed by: 1 member
by LulaBrazilia » Tue Dec 10, 2013 11:35 am
If $1 were invested at 8 percent interest compounded annually, the total value of the investment, in dollars, at the end of 6 years would be

A) (1.8)^6

B) (1.08)^6

C) 6(1.08)

D) 1 + (0.08)^6

E) 1 + 6(0.08)


I tend to confuse compound and simple interest, and how to find the total vs just the interest.
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Source: — Problem Solving |
User avatar
GMAT Instructor
Posts: 1052
Joined: Fri May 21, 2010 1:30 amFollowed by: 98 members
Thanked: 335 times

by Patrick_GMATFix » Tue Dec 10, 2013 12:01 pm
Hope this helps. My signature below has more info.

Image

-Patrick
  • Ask me about tutoring.
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 16207
Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members
Location: Vancouver, BC
Thanked: 5254 times
GMAT Score:770

Compound interest

by Brent@GMATPrepNow » Tue Dec 10, 2013 1:30 pm
LulaBrazilia wrote:If $1 were invested at 8 percent interest compounded annually, the total value of the investment, in dollars, at the end of 6 years would be

A) (1.8)^6
B) (1.08)^6
C) 6(1.08)
D) 1 + (0.08)^6
E) 1 + 6(0.08)
You can use this formula to calculate compound interest:
Final balance = P( 1 + r/c)^nc where:
P = the principal (the initial investment)
r = the annual interest rate expressed as a decimal
c = the number of times the interest is compounded each year
n = the number of years the investment collects interest

For this question, P = $1, r = 0.08, c = 1, n = 6
So, the FINAL BALANCE = 1( 1 + 0.08/1)^[(6)(1)]
= (1.08)^6
= B

Cheers,
Brent
Last edited by Brent@GMATPrepNow on Thu Oct 12, 2017 2:55 pm, edited 1 time in total.
Brent Hanneson - Creator of GMATPrepNow.com
Image
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
User avatar
Master | Next Rank: 500 Posts
Posts: 359
Joined: Wed Mar 11, 2009 4:37 amFollowed by: 2 members
Location: Kolkata, India
Thanked: 50 times

by Abhishek009 » Wed Dec 11, 2013 7:56 am
LulaBrazilia wrote:If $1 were invested at 8 percent interest compounded annually, the total value of the investment, in dollars, at the end of 6 years would be

A) (1.8)^6

B) (1.08)^6

C) 6(1.08)

D) 1 + (0.08)^6

E) 1 + 6(0.08)


I tend to confuse compound and simple interest, and how to find the total vs just the interest.
CI = P( 1 +R/100)^N

*In this case P = 1 , R = 8 , N = 6


Hence Ci will be = 1(1 + 8/100)^6

1(1+0.08)^6 = (1.08)^6
Abhishek
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
User avatar
GMAT Instructor
Posts: 1462
Joined: Thu Apr 09, 2015 9:34 amFollowed by: 22 members
Location: New York, NY
Thanked: 39 times

by Jeff@TargetTestPrep » Thu Dec 14, 2017 3:40 pm
LulaBrazilia wrote:If $1 were invested at 8 percent interest compounded annually, the total value of the investment, in dollars, at the end of 6 years would be

A) (1.8)^6

B) (1.08)^6

C) 6(1.08)

D) 1 + (0.08)^6

E) 1 + 6(0.08)
Using the compound interest formula, we have:

future value = present value(1 + rate/n)^nt

(in which n = number of compounding periods in a year and t = total number of years)

future value = 1(1 + 0.08/1)^(1)(6)

future value = (1.08)^6

Answer: B

Jeffrey Miller
Head of GMAT Instruction
[email protected]

Image

See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 16207
Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members
Location: Vancouver, BC
Thanked: 5254 times
GMAT Score:770

by Brent@GMATPrepNow » Sat Jan 13, 2018 9:17 am
LulaBrazilia wrote:If $1 were invested at 8 percent interest compounded annually, the total value of the investment, in dollars, at the end of 6 years would be

A) (1.8)^6

B) (1.08)^6

C) 6(1.08)

D) 1 + (0.08)^6

E) 1 + 6(0.08)
You can use this formula to calculate compound interest:
Final balance = P( 1 + r/c)^nc where:
P = the principal (the initial investment)
r = the annual interest rate expressed as a decimal
c = the number of times the interest is compounded each year
n = the number of years the investment collects interest

For this question, P = $1, r = 0.08, c = 1, n = 6
So, the FINAL BALANCE = 1( 1 + 0.08/1)^[(6)(1)]
= (1.08)^6

Answer: B

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
Image
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Post new topic Post Reply
• Page 1 of 1