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?
A) 2d/3
B) 3d/4
C) 4d/3
D) 3d/2
E) 8d/3
OA: E
explain please
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Investment of d dollars at k percent simple annual interest?
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phoenixhazard
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GMATGuruNY
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$600 interest over 2 years means 600/2 = 300/year.phoenixhazard 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?
A) 2d/3
B) 3d/4
C) 4d/3
D) 3d/2
E) 8d/3
OA: E
explain please
Plug in d = 3000, k = 10.
This works because 10% of 3000 = 300.
$2400 over 3 years means 2400/3 = 800/year.
Now we plug d=3000 into all the answer choices to which will yield $800 interest at an annual rate of 10%:
Only answer choice E works:
8d/3 = 8*3000/3 = 8000
10% of 8000 = 800.
The correct answer is E.
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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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phoenixhazard
- Senior | Next Rank: 100 Posts
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How did you know to backsolve? I have trouble determining when to solve using the answers and not trying to find an equation and solve.GMATGuruNY wrote:$600 interest over 2 years means 600/2 = 300/year.phoenixhazard 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?
A) 2d/3
B) 3d/4
C) 4d/3
D) 3d/2
E) 8d/3
OA: E
explain please
Plug in d = 3000, k = 10.
This works because 10% of 3000 = 300.
$2400 over 3 years means 2400/3 = 800/year.
Now we plug d=3000 into all the answer choices to which will yield $800 interest at an annual rate of 10%:
Only answer choice E works:
8d/3 = 8*3000/3 = 8000
10% of 8000 = 800.
The correct answer is E.
