Hi,
Is anybody aware of a faster method for solving Q. 78 in the PS section in the OG ed 12?
This is the question:
Leona bought a 1-yr $10,000 certificate of deposit that paid interest at an annual rate of 8% compounded semianually. What was the total amount of interest paid on this certificate of deposit?
(A) $10464
(B) $ 864
(C)$ 816
(D)$ 800
(E)$ 480
Using the Compound interest formula is too time-consuming.
Faster method for OG 12th ED Q. 78 in PS?
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- sam2304
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Given the interest is compounded semi annually @ 8% so its 4% for every 6 months
For compound interest we consider interest as well while compounding the second time.
So 10000 $ for 6 months @ 4% will yield = 400$
Now the principal becomes 10400, again for 6 months @4% = 416 $
Total amount = 10400 + 416 = 10816
So total amount - initial amount will give us the total interest = 10816 - 10000 = 816
IMO C.
If you can remember calculating interest easily without formulas then you can go for this else the easiest way is to remember the formulas.
For compound interest we consider interest as well while compounding the second time.
So 10000 $ for 6 months @ 4% will yield = 400$
Now the principal becomes 10400, again for 6 months @4% = 416 $
Total amount = 10400 + 416 = 10816
So total amount - initial amount will give us the total interest = 10816 - 10000 = 816
IMO C.
If you can remember calculating interest easily without formulas then you can go for this else the easiest way is to remember the formulas.
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hi, normally i have never seen any math problem that has root of 3 or 4, so dont be so worry, it only has root of 2 like this one and you know its kinda simple if you know the formulaamelia21 wrote:Hi,
Is anybody aware of a faster method for solving Q. 78 in the PS section in the OG ed 12?
This is the question:
Leona bought a 1-yr $10,000 certificate of deposit that paid interest at an annual rate of 8% compounded semianually. What was the total amount of interest paid on this certificate of deposit?
(A) $10464
(B) $ 864
(C)$ 816
(D)$ 800
(E)$ 480
Using the Compound interest formula is too time-consuming.
interest= moneyX(1+i%/2)^2
so it would be
interest=10000*(1+0.08/2)^2
- GMATGuruNY
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Since the interest is compounded only once, the compounded interest will be just a bit more than the simple interest.amelia21 wrote:Hi,
Is anybody aware of a faster method for solving Q. 78 in the PS section in the OG ed 12?
This is the question:
Leona bought a 1-yr $10,000 certificate of deposit that paid interest at an annual rate of 8% compounded semianually. What was the total amount of interest paid on this certificate of deposit?
(A) $10464
(B) $ 864
(C)$ 816
(D)$ 800
(E)$ 480
Using the Compound interest formula is too time-consuming.
Since .08(10,000) = 800, the correct answer will be just a bit more than 800.
The correct answer is C.
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Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at [email protected].
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