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$500 invested for three years at 5% annual interest : Quantitative Comparison Questions

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Re: $500 invested for three years at 5% annual interest [#permalink]
Expert Reply
saptadas1809 wrote:
Shoudn't the answer be D?

If the interest is compounded annually, then A is greater, but if it is simple interest, then both are equal


\(500 * 1.05 *1.05 *1.05 \approx 578\)

A > B

See more at this link about Interest https://gre.myprepclub.com/forum/gre-math- ... tml#p81625

More practice https://gre.myprepclub.com/forum/quantitat ... s%5B%5D=15

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Re: $500 invested for three years at 5% annual interest [#permalink]
Carcass wrote:
Quantity A
Quantity B
$500 invested for three years at 5% annual interest
$575



A)The quantity in Column A is greater.
B)The quantity in Column B is greater.
C)The two quantities are equal.
D)The relationship cannot be determined from the information given.

Kudos for the right answer and explanation

Why is it A, there is no evidence that it is compounded rather than simple.
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Re: $500 invested for three years at 5% annual interest [#permalink]
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Here we have no doubt, as per the stem written, that we do have a simple interest.

Rather it is not the best written and the answer I agree should be C

In the case of simple interest we do have

I=Prt

500*0.05*3=75

Compound interest is an exponential function.
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Re: $500 invested for three years at 5% annual interest [#permalink]
Again the same problem

The question doesn't mention whether its compound or simple interest.

Hence the answer should be D. Cannot compare.
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Re: $500 invested for three years at 5% annual interest [#permalink]
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