Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional comp

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M7MBA: Moderator; Posts: 2058; Joined: Sun Oct 29, 2017 4:24 amFollowed by: 5 members; Thanked: 1 times

by M7MBA » Sun Dec 27, 2020 3:17 pm

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Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional compound interest of $4800, for how many more years should she keep her money invested?

A. 7 years
B. 14 years
C. 21 years
D. 24 years
E. 30 years

Answer: B

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Source: Beat The GMAT — Problem Solving | Sun Dec 27, 2020 3:17 pm

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Re: Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional

by Scott@TargetTestPrep » Mon Mar 22, 2021 8:37 am

M7MBA wrote: ↑
Sun Dec 27, 2020 3:17 pm
Jane's investment of $200 increased by 200% in 7 years when compounded annually. If she wants to earn an additional compound interest of $4800, for how many more years should she keep her money invested?

A. 7 years
B. 14 years
C. 21 years
D. 24 years
E. 30 years

Answer: B

Solution:

We see that the original investment actually triples from $200 to $600 in 7 years . So it will triple again in another 7 years, from $600 to $1800. It will again triple in 7 more years, from $1800 to $5400. At this point, we see that the earning in additional interest is exactly 5400 - 600 = $4800. Therefore, it takes 7 + 7 = 14 additional years to earn $4800 after the investment accumulated to $600.

Answer: B

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