Investment

Rudy414 wrote:An investment of d dollars at k percent simple 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

An investment of d dollars at k percent simple annual interest yields $600 over a 2-year period.
In other words, an investment of d dollars yields $300 in interest each year.

What dollar amount invested at the same rate will yield $2,400 interest over a 3-year period?
In other words, how much money must we invest to earn $800 in interest each year?

If a d dollar investment yields $300 in interest each year, then:
- a 2d dollar investment would yield $600 (2 times $300) in interest each year
- a 3d dollar investment would yield $900 (3 times $300) in interest each year
- a 4d dollar investment would yield $1200 (4 times $300) in interest each year
- etc.

So, to increase the annual interest from $300 to $800, we must invest 800/300 times as much money.
800/300 = 8/3, so we must invest (8/3)d dollars [aka 8d/3 dollars]

Answer = E

Cheers,
Brent