If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years. If Pat's parents invested $5,000 in a long-term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of the investment 18 years later, when Pat is ready for college? (A) $20000 (B) $15000 (C) $12000 (D) $10000 (E) $9000 OAA Please explain.

kamalj wrote:If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years. If Pat's parents invested $5,000 in a long-term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of the investment 18 years later, when Pat is ready for college? (A) $20000 (B) $15000 (C) $12000 (D) $10000 (E) $9000 OAA Please explain. If the investment doubles every 70/r years, and r = 8, then we know the investment will double every 70/8, or approximately 9 years. In 18 years, the investment will double twice. After 9 years: 5000*2 = 10,000 After 18 years: 10,000*2 = 20,000 The answer is A

(And I wrote a post about a similarly themed question here: https://www.veritasprep.com/blog/2016/0 ... -the-gmat/

kamalj wrote:If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 70/r years. If Pat's parents invested $5,000 in a long-term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of the investment 18 years later, when Pat is ready for college? (A) $20000 (B) $15000 (C) $12000 (D) $10000 (E) $9000 Given: r = percent interest Given: Investment DOUBLES in approximately 70/r years. Pat's parents invest $5,000 at 8 percent 70/8 ≈ 9 In other words, the investment will DOUBLE every 9 years. Value of investment after 0 years: $5,000 Value of investment after 9 years: $5,000 x 2 = $10,000 Value of investment after 18 years: $10,000 x 2 = $20,000 Answer: A Cheers, Brent

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