word problem

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rerika01: Junior | Next Rank: 30 Posts; Posts: 11; Joined: Tue Aug 31, 2010 7:40 am; Thanked: 2 times

by rerika01 » Tue Jul 05, 2011 7:09 pm

An investment of d dollars at k percent simple annual interest yields $600 interest over a 2-year period. In terms of d, what dollar amount investment at the same rate will yield $2,400 interest over a 3-year period?

a) 2d/3
b) 3d/4
c) 4d/3
d) 3d/2
e) 8d/3

Thanks,

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Source: Beat The GMAT — Problem Solving | Tue Jul 05, 2011 7:09 pm

GMATGuruNY: GMAT Instructor; Posts: 15539; Joined: Tue May 25, 2010 12:04 pmFollowed by: 1906 members; Location: New York, NY; Thanked: 13060 times; GMAT Score:790

by GMATGuruNY » Tue Jul 05, 2011 7:26 pm

rerika01 wrote:An investment of d dollars at k percent simple annual interest yields $600 interest over a 2-year period. In terms of d, what dollar amount investment at the same rate will yield $2,400 interest over a 3-year period?

a) 2d/3
b) 3d/4
c) 4d/3
d) 3d/2
e) 8d/3

Thanks,

We can plug in values.

Let k = 100% annual interest.
Thus, the interest earned each year = the amount invested.

$600 interest over 2 years = $300 per year.
Thus, d = 300.

$2400 interest over 3 years = $800 per year.
Thus, $800 must be invested. This is our target.

Now we plug d=300 into the answers to see which yields our target of 800.

Only answer choice E works:
8d/3 = 8*300/3 = 800.

The correct answer is E.

Last edited by GMATGuruNY on Wed Jul 06, 2011 6:18 am, edited 1 time in total.

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amit2k9: Master | Next Rank: 500 Posts; Posts: 461; Joined: Tue May 10, 2011 9:09 amFollowed by: 3 members; Location: pune; Thanked: 36 times

by amit2k9 » Tue Jul 05, 2011 9:30 pm

using SI formula,

d*2*k/100 = 600

dk=30*10^4

x * 3 *k/100 = 2400

x = 80 *10^4/k

thus we have x = 8d/3.

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worldpeace93: Junior | Next Rank: 30 Posts; Posts: 21; Joined: Sun Jun 05, 2011 10:39 pmFollowed by: 1 member; Thanked: 2 times

by worldpeace93 » Tue Jul 05, 2011 10:20 pm

Answer is E

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