• Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas Prep
  • Kaplan Test Prep
    Free Practice Test & Review
    How would you score if you took the GMAT

    Available with Beat the GMAT members only code

    MORE DETAILS
    Kaplan Test Prep
  • Magoosh
    Magoosh
    Study with Magoosh GMAT prep

    Available with Beat the GMAT members only code

    MORE DETAILS
    Magoosh
  • EMPOWERgmat Slider
    1 Hour Free
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    EMPOWERgmat Slider
  • e-gmat Exclusive Offer
    Get 300+ Practice Questions
    25 Video lessons and 6 Webinars for FREE

    Available with Beat the GMAT members only code

    MORE DETAILS
    e-gmat Exclusive Offer
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • Target Test Prep
    5-Day Free Trial
    5-day free, full-access trial TTP Quant

    Available with Beat the GMAT members only code

    MORE DETAILS
    Target Test Prep
  • Economist Test Prep
    Free Trial & Practice Exam
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    Economist Test Prep
  • Varsity Tutors
    Award-winning private GMAT tutoring
    Register now and save up to $200

    Available with Beat the GMAT members only code

    MORE DETAILS
    Varsity Tutors
  • The Princeton Review
    FREE GMAT Exam
    Know how you'd score today for $0

    Available with Beat the GMAT members only code

    MORE DETAILS
    The Princeton Review

Java invests in a new mutual fund. The fund averages 10%...

This topic has 2 expert replies and 1 member reply

Java invests in a new mutual fund. The fund averages 10%...

Post
Java invests in a new mutual fund. The fund averages 10% growth annually for the first three years, but it loses 30% of its value in the fourth year. At the end of four years, the value of the mutual fund is approximately what percent of the amount Java originally paid?

A. 93%
B. 90%
C. 88%
D. 85%
E. 80%

The OA is A.

I can take an amount for initial investment, for example 100, then of the first three years I get 100*1.10^3 = 133 approximately.

Then in the fourth year loses 30%, then 133*0.7 = 93 option A.

Experts, it is correct my solution? I'm not completely sure. Thanks.

  • +1 Upvote Post
  • Quote
  • Flag

Top Member

Post
swerve wrote:
Java invests in a new mutual fund. The fund averages 10% growth annually for the first three years, but it loses 30% of its value in the fourth year. At the end of four years, the value of the mutual fund is approximately what percent of the amount Java originally paid?

A. 93%
B. 90%
C. 88%
D. 85%
E. 80%

The OA is A.

I can take an amount for initial investment, for example 100, then of the first three years I get 100*1.10^3 = 133 approximately.

Then in the fourth year loses 30%, then 133*0.7 = 93 option A.

Yes, your approach is correct

Experts, it is correct my solution? I'm not completely sure. Thanks.

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

Post
swerve wrote:
Java invests in a new mutual fund. The fund averages 10% growth annually for the first three years, but it loses 30% of its value in the fourth year. At the end of four years, the value of the mutual fund is approximately what percent of the amount Java originally paid?

A. 93%
B. 90%
C. 88%
D. 85%
E. 80%

The OA is A.

I can take an amount for initial investment, for example 100, then of the first three years I get 100*1.10^3 = 133 approximately.

Then in the fourth year loses 30%, then 133*0.7 = 93 option A.

Experts, it is correct my solution? I'm not completely sure. Thanks.
Hi swerve,

You used the correct approach.

_________________
GMAT Prep From The Economist
We offer 70+ point score improvement money back guarantee.
Our average student improves 98 points.

  • +1 Upvote Post
  • Quote
  • Flag
Free 7-Day Test Prep with Economist GMAT Tutor - Receive free access to the top-rated GMAT prep course including a 1-on-1 strategy session, 2 full-length tests, and 5 ask-a-tutor messages. Get started now.
Post
swerve wrote:
Java invests in a new mutual fund. The fund averages 10% growth annually for the first three years, but it loses 30% of its value in the fourth year. At the end of four years, the value of the mutual fund is approximately what percent of the amount Java originally paid?

A. 93%
B. 90%
C. 88%
D. 85%
E. 80%
We can let the original value of the fund = n.

So after 4 years it’s worth:

n x 1.1 x 1.1 x 1.1 x 0.7 = 0.9317n, which is about 93%.

Answer: A

_________________
Jeffrey Miller Head of GMAT Instruction

  • +1 Upvote Post
  • Quote
  • Flag

Top First Responders*

1 Jay@ManhattanReview 81 first replies
2 Brent@GMATPrepNow 67 first replies
3 fskilnik 54 first replies
4 GMATGuruNY 37 first replies
5 Rich.C@EMPOWERgma... 13 first replies
* Only counts replies to topics started in last 30 days
See More Top Beat The GMAT Members

Most Active Experts

1 image description fskilnik

GMAT Teacher

201 posts
2 image description Brent@GMATPrepNow

GMAT Prep Now Teacher

155 posts
3 image description Scott@TargetTestPrep

Target Test Prep

105 posts
4 image description Jay@ManhattanReview

Manhattan Review

97 posts
5 image description GMATGuruNY

The Princeton Review Teacher

91 posts
See More Top Beat The GMAT Experts