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

Redeem

compound interest

This topic has expert replies
Post new topic Post Reply
Previous Topic Next Topic
Master | Next Rank: 500 Posts
Posts: 343
Joined: Mon Jan 21, 2008 3:28 pm
Thanked: 4 times

compound interest

by arorag » Sat Sep 20, 2008 3:47 pm
$10,000 is deposited in a certain account that pays r percent annual interest compounded annually, the amount D(t), in dollars, that the deposit will grow to in t years in given by D(t)=10,000(1+(r/100))t What amount will the deposit grow to in 3 years?

(1) D(t) = 11,000
(2) r=10



IMO B. OA D
Top
Source: — Data Sufficiency |
Senior | Next Rank: 100 Posts
Posts: 31
Joined: Sun Jul 27, 2008 12:41 pm
Location: New York, NY
Thanked: 2 times

by Azntycoon » Tue Sep 23, 2008 6:12 pm
IMO, it's B.

We're given the standard compound interest formula, and we're asked what the $10,000 deposit will grow to in 3 years.

1) Not sufficient. While we're given the future value of the deposit, we don't know the rate (r), and we don't know the number of years (t).

2) Sufficient. You can fill in the formula since we're given the rate (r) and time (t).
Top
Legendary Member
Posts: 891
Joined: Sat Aug 16, 2008 4:21 am
Thanked: 27 times
Followed by:1 members
GMAT Score:660(

by 4meonly » Wed Sep 24, 2008 7:34 am
A will be SUFF if we are told that
D(t) = 11,000 is a total amount from 1 year deposit
Top
Master | Next Rank: 500 Posts
Posts: 198
Joined: Fri Mar 09, 2007 8:40 pm
Thanked: 7 times

by kris610 » Wed Sep 24, 2008 4:03 pm
Azntycoon wrote:IMO, it's B.

We're given the standard compound interest formula, and we're asked what the $10,000 deposit will grow to in 3 years.

1) Not sufficient. While we're given the future value of the deposit, we don't know the rate (r), and we don't know the number of years (t).

Doesn't the question ask how much will 10k grow to in 3 years?
Top
Senior | Next Rank: 100 Posts
Posts: 31
Joined: Sun Jul 27, 2008 12:41 pm
Location: New York, NY
Thanked: 2 times

by Azntycoon » Thu Sep 25, 2008 3:50 am
4meonly wrote:A will be SUFF if we are told that
D(t) = 11,000 is a total amount from 1 year deposit
Stem A only says 11,000. It never indicated how long it took the money to grow. Therefore, A is not sufficient.
Top
Junior | Next Rank: 30 Posts
Posts: 27
Joined: Thu Mar 20, 2008 8:00 am
Location: France

by louvre » Thu Sep 25, 2008 5:53 am
I think either of 2 statements is sufficient!

the equation is D(t)=10,000(1+(r/100))t. T is already given as 3. So the only variables are D(t) and r.

from St1, D(t) is given and solve to get r and the equation is complete. so sufficient.

From St2 r is given and solve to get D(t). and hence sufficient too!

What you say?
Top
Legendary Member
Posts: 891
Joined: Sat Aug 16, 2008 4:21 am
Thanked: 27 times
Followed by:1 members
GMAT Score:660(

by 4meonly » Thu Sep 25, 2008 6:49 am
Azntycoon wrote:
4meonly wrote:A will be SUFF if we are told that
D(t) = 11,000 is a total amount from 1 year deposit
Stem A only says 11,000. It never indicated how long it took the money to grow. Therefore, A is not sufficient.
Agree, that is exactly what I said
Top
User avatar
GMAT Instructor
Posts: 3225
Joined: Tue Jan 08, 2008 2:40 pm
Location: Toronto
Thanked: 1710 times
Followed by:614 members
GMAT Score:800

by Stuart@KaplanGMAT » Thu Sep 25, 2008 12:18 pm
Are you sure there isn't a typo? Is statement (1) supposed to say:

D(1) = 11000?

If we know that D(1) = 11000, we can solve for r, which means we can answer the question.

D(1) = 11000 is also consistent with the information given in statement (2) (i.e. if we solve for D(1) = 11000 we get the value r=10), which further increases my certainty that statement (1) has been misquoted somewhere.

As an aside, saying that D(t) = 11000 doesn't make sense, but it is sufficient to answer the question. If D(t) is constant, then any value you plug in for t will give you the same answer, 11000.

So, technically speaking, statement (1) is sufficient as written, but it makes no sense.

What's the source of this question?
Image

Stuart Kovinsky | Kaplan GMAT Faculty | Toronto

Kaplan Exclusive: The Official Test Day Experience | Ready to Take a Free Practice Test? | Kaplan/Beat the GMAT Member Discount
BTG100 for $100 off a full course
Top
User avatar
Legendary Member
Posts: 871
Joined: Wed Aug 13, 2008 7:48 am
Thanked: 48 times

by stop@800 » Thu Sep 25, 2008 1:04 pm
I am sure it must be a typo
but
whatever it may be.....

the answer can never be A
it is D


A
D(t) = 11000
you have your answer
whatever t may be, the ans is 3
sufficient


B
r=10
solve it, u have r and t
sufficient

so ans is D


correction:
I think d(t) must be d(1)
10K at 10% after 1 year will become 11k

so even if its d(1)
the answer will still be D
because we can find r from d(1)
Top
Post new topic Post Reply
• Page 1 of 1