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GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2506
Given Kudos: 1055
GPA: 3.39
If $10,000 is invested at x percent simple annual interest for n years
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29 Nov 2022, 08:21
29 Nov 2022, 08:21
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Expert Reply
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Question Stats:
66% (00:45) correct
33% (00:52) wrong based on 3 sessions
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If $10,000 is invested at x percent simple annual interest for n years, which of the following represents the total amount of interest, in dollars, that will be earned by this investment in the n years?
A. \(10,000(x^n)\)
B. \(10,000(\frac{x}{100})^n\)
C. \(10,000n(\frac{x}{100})\)
D. \(10,000(1+\frac{x}{100})^n\)
E. \(10,000n(1+\frac{x}{100})\)
A. \(10,000(x^n)\)
B. \(10,000(\frac{x}{100})^n\)
C. \(10,000n(\frac{x}{100})\)
D. \(10,000(1+\frac{x}{100})^n\)
E. \(10,000n(1+\frac{x}{100})\)
GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2506
Given Kudos: 1055
GPA: 3.39
Re: If $10,000 is invested at x percent simple annual interest for n years
[#permalink]
30 Nov 2022, 22:56
30 Nov 2022, 22:56
Expert Reply
The reasoning is from the following:
The formula for simple rate of interest is F = P(1+rt) where
F = future value
P = present value
r = rate
t = time
We can substitute x for r
n for t
and 10,000 in for P
F = 10,000(1+xn)
This formula will tell you the principal (original amount invested) + interest, but we only want interest, so the "1+" portion of the formula in unecessary. -->
F = 10,000(xn)
Now, we need to get the x into terms of a percentage, so we divide x by 100 -->
F = 10,000(n * x/100)
If we move the n outisde the brackets, we get -->
F = 10,000n(x/100) --> C
Answer: C
The formula for simple rate of interest is F = P(1+rt) where
F = future value
P = present value
r = rate
t = time
We can substitute x for r
n for t
and 10,000 in for P
F = 10,000(1+xn)
This formula will tell you the principal (original amount invested) + interest, but we only want interest, so the "1+" portion of the formula in unecessary. -->
F = 10,000(xn)
Now, we need to get the x into terms of a percentage, so we divide x by 100 -->
F = 10,000(n * x/100)
If we move the n outisde the brackets, we get -->
F = 10,000n(x/100) --> C
Answer: C
gmatclubot
Re: If $10,000 is invested at x percent simple annual interest for n years [#permalink]
30 Nov 2022, 22:56
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