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Gprep easy problem

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Gprep easy problem

by NikolayZ » Thu Nov 05, 2009 1:39 am
I came across this one doing gmatprep yesterday, it was one of my 4 mistakes in quant. But i was 100% sure that i solved it right.

Problem: If 10000 principal has to be invested at a simple percent x for n years, which of the forrowing represents INTEREST gained by the investment.

1) 10000(x/100)^n
2) 10000n(x/100)
3) 10000(1+x/100)^n
4) 10000n(1+x/100)
5) whatever :)

I ll post the OA after few replies. [/spoiler]
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by xcusemeplz2009 » Thu Nov 05, 2009 2:51 am
IMO 2

wats the OA
It does not matter how many times you get knocked down , but how many times you get up
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by NikolayZ » Thu Nov 05, 2009 3:00 am
Well, khm, i am blamed, just figured it out :D
I don't know why, but i thought that compounded and simple rates differ only when we count interest quaterly or semi-annually :)
Xcusemeplz, you are right. OA is B.
Compounded would be A
Simple is B.
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by xcusemeplz2009 » Thu Nov 05, 2009 3:33 am
NikolayZ wrote:Well, khm, i am blamed, just figured it out :D
I don't know why, but i thought that compounded and simple rates differ only when we count interest quaterly or semi-annually :)
Xcusemeplz, you are right. OA is B.
Compounded would be ASimple is B.
i think u r again mistaken as compounded IMO will be C

Ci=P[1+r/100]^t
si=prt/100
ci quarterly =p[1+r/400]^4t
ci half yearly=p[1+r/200]^2t

just check again i may be wrng
It does not matter how many times you get knocked down , but how many times you get up
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by NikolayZ » Thu Nov 05, 2009 3:43 am
no mate, C and D represent interest + principal. Question asked only about interest gained. So, b for simple.
Compounded interest gain formula is nicely posted by Acenikk ;)
Last edited by NikolayZ on Thu Nov 05, 2009 5:32 am, edited 2 times in total.
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by acenikk » Thu Nov 05, 2009 5:07 am
Hi NikolayZ, you are right that the answer is 2, but you are perhaps wrong on the compound interest part. The CI should be 10000(1 + x/100)^n - 10000. How can this be 10000(x/100)^n ?
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by NikolayZ » Thu Nov 05, 2009 5:30 am
Argh, i should stop learning for the last day before exam :)
You are right. Thanks.
p.s. corrected previous message.
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