• 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
  • 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
  • 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
  • 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
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas 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

Pat invested x dollars in a fund that paid 8 percent...

This topic has 1 expert reply and 0 member replies

Pat invested x dollars in a fund that paid 8 percent...

Post Fri Feb 23, 2018 7:37 am
Pat invest x dollars in a fund that paid 8 percent annual interest, compounded annually. Which of the following represents the value, in dollars, of Pat's investment plus interest at the end of 5 years?

$$A.\ 5\left(0.08x\right)$$
$$B.\ 5\left(1.08x\right)$$
$$C.\ \left(1+5\left(0.08x\right)\right)x$$
$$D.\ 1.08^5\cdot x$$
$$E.\ \left(1.08x\right)^5$$

The OA is D.

Please, can any expert explain this PS question for me? I tried to solve it but I can't get the correct answer. I need your help. Thanks.

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

DavidG@VeritasPrep Legendary Member
Joined
14 Jan 2015
Posted:
2667 messages
Followed by:
120 members
Upvotes:
1153
GMAT Score:
770
Post Fri Feb 23, 2018 9:15 am
swerve wrote:
Pat invest x dollars in a fund that paid 8 percent annual interest, compounded annually. Which of the following represents the value, in dollars, of Pat's investment plus interest at the end of 5 years?

$$A.\ 5\left(0.08x\right)$$
$$B.\ 5\left(1.08x\right)$$
$$C.\ \left(1+5\left(0.08x\right)\right)x$$
$$D.\ 1.08^5\cdot x$$
$$E.\ \left(1.08x\right)^5$$

The OA is D.

Please, can any expert explain this PS question for me? I tried to solve it but I can't get the correct answer. I need your help. Thanks.
The compound interest formula:

Total Value of Investment = P * (1 + r)^t
P: Principal
r: interest rate for period in question
t: number of times compounded

In this case:
P = x
r = .08
t = 5

Plug 'n chug: x * (1.08)^5. That's D

_________________
Veritas Prep | GMAT Instructor

Veritas Prep Reviews
Save $100 off any live Veritas Prep GMAT Course

  • +1 Upvote Post
  • Quote
  • Flag
Enroll in a Veritas Prep GMAT class completely for FREE. Wondering if a GMAT course is right for you? Attend the first class session of an actual GMAT course, either in-person or live online, and see for yourself why so many students choose to work with Veritas Prep. Find a class now!

Top First Responders*

1 GMATGuruNY 111 first replies
2 Brent@GMATPrepNow 43 first replies
3 Rich.C@EMPOWERgma... 35 first replies
4 Jay@ManhattanReview 28 first replies
5 Scott@TargetTestPrep 11 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 GMATGuruNY

The Princeton Review Teacher

157 posts
2 image description Brent@GMATPrepNow

GMAT Prep Now Teacher

141 posts
3 image description Scott@TargetTestPrep

Target Test Prep

104 posts
4 image description Jeff@TargetTestPrep

Target Test Prep

94 posts
5 image description Max@Math Revolution

Math Revolution

86 posts
See More Top Beat The GMAT Experts