alex.gellatly wrote:An investment of d dollars at k percent simple annual interest yields $600 interest over a 2-year period. In terms of d, what dollar amount invested at the same rate will yield $2,400 interest over a 3-year period
2d/3
3d/4
4d/3
3d/2
8d/3
PLUG AND CHUG:
1. Choose a good value for k.
2. Use the value of k to determine the value of d.
3. Answer the question and get a target.
4. Determine which answer choice yields the target.
Step 1:
Let the interest rate = 100%:
k=100.
Step 2:
Since $600 is earned over 2 years, $300 is earned each year.
To earn $300 at an interest rate of 100%, the amount invested = $300:
d=300.
Step 3:
To earn $2400 over 3 years, $800 must be earned each year.
To earn $800 at an interest rate of 100%, the amount invested = 800.
This is the target.
Step 4:
Now plug d=300 into the answers to see which yields the target of 800.
A quick scan of the answers reveals that only
E works:
8d/3 = 8(300)/3 = 800.
The correct answer is
E.
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