[Math Revolution GMAT math practice question]
Tom saved $10,000 at a constant compound interest rate of r percent annually. After 10 years, the balance is double the principal. What will be the balance 30 years after the deposit?
A. $30,000
B. $40,000
C. $50,000
D. $60,000
E. $80,000
Tom saved $10,000 at a constant compound interest rate of r
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- Max@Math Revolution
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Max@Math Revolution wrote:[Math Revolution GMAT math practice question]
Tom saved $10,000 at a constant compound interest rate of r percent annually. After 10 years, the balance is double the principal. What will be the balance 30 years after the deposit?
A. $30,000
B. $40,000
C. $50,000
D. $60,000
E. $80,000
Original deposit: 10,000.
The balance doubles every 10 years.
After 10 years, we get:
2*10,000 = 20,000.
After 20 years, we get:
2*20,000 = 40,000.
After 30 years, we get:
2*40,000 = 80,000.
The correct answer is E.
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My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
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- abhishekgoswami1234u
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The question says,the balance got doubled in 10 years of time.This means Balance after 10 years is 10,000*2= 20,000$ .Going by the same logic, and since in 20 years, the balance will be double of the balance in 10 years, which means 20,000*2= 40,000$. In another 10 years, that means, at the end of 30 years, the balance will again double up. The final balance will thus become 40,000*2= 80,000$.
Hence Answer
Hence Answer
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=>
After 10 years, we have 10,000(1+r)^10 = 20,000 or (1+r)^10 = 2.
So, after 30 years the balance is 10,000(1+r)^30 = 10,000((1+r)^10)^3= 10,000*2^3 =10,000*8 = 80,000.
Therefore, the answer is E.
Answer: E
After 10 years, we have 10,000(1+r)^10 = 20,000 or (1+r)^10 = 2.
So, after 30 years the balance is 10,000(1+r)^30 = 10,000((1+r)^10)^3= 10,000*2^3 =10,000*8 = 80,000.
Therefore, the answer is E.
Answer: E
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