An investor purchased a share of non-dividend-paying stock for p dollars on Monday. For a certain number of days, the value of the share increased by r percent per day. After this period of constant increase, the value of the share decreased the next day by q dollars and the investor decided to sell the share at the end of that day for v dollars, which was the value of the share at that time. How many working days after the investor bought the share was the share sold, if
r= 100 * ( sqrt( (v+q)/p ) -1 ) ?
A) Two working days later.
B) Three working days later.
C) Four working days later.
D) Five working days later.
E) Six working days later
Investment, Interest rates and formula
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For me its Bpepeprepa wrote:An investor purchased a share of non-dividend-paying stock for p dollars on Monday. For a certain number of days, the value of the share increased by r percent per day. After this period of constant increase, the value of the share decreased the next day by q dollars and the investor decided to sell the share at the end of that day for v dollars, which was the value of the share at that time. How many working days after the investor bought the share was the share sold, if
r= 100 * ( sqrt( (v+q)/p ) -1 ) ?
A) Two working days later.
B) Three working days later.
C) Four working days later.
D) Five working days later.
E) Six working days later
Assuming X days ...
i am using Compound Interest.
v = p (1+r/100)^x - q
if i solve for r i get
r=(xth root of (v +q)/p -1 )*100.......................................1
Question stem tells us that
r= 100 * ( sqrt( (v+q)/p ) -1 )...........................................2
substitute 2 in 1
we get
100 * ( ( (v+q)/p ) -1 )^1/2 = [(v +q)/p -1 )]^1/x*100
from this we know X =2
Thus the shares rose for 2 days and on the following day they fell and the investor sold in on the next day
thus its 2+ 1 days = 3
hope that helps..
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Wow... I spent so long on this. Very good job Sudhir, very impressive, especially if you did it in 2 minutes like a standard GMAT question!
I'm okay for solving x to get 2 days in the compound interest formula, but how do you know the stock was sold 1 day later?
I'm okay for solving x to get 2 days in the compound interest formula, but how do you know the stock was sold 1 day later?
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Because the question saysEdthesock wrote:Wow... I spent so long on this. Very good job Sudhir, very impressive, especially if you did it in 2 minutes like a standard GMAT question!
I'm okay for solving x to get 2 days in the compound interest formula, but how do you know the stock was sold 1 day later?
"After this period of constant increase, the value of the share decreased the next day by q dollars and the investor decided to sell the share at the end of that day for v dollars"
this period here is 2 days
next day would be day 3.
hope this clear .. do let me know if u need any help ..