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You are here: Home / GMAT / Official GMAT Guides / 2018 Official GMAT Guide /

Question 130 Problem Solving 2018 GMAT Official Guide

Question 130 Problem Solving 2018 GMAT Official Guide

 
Video explanation: Alex deposited x dollars into a new account that earned 8…

Comments

  1. Aditi Gupta says

    November 14, 2019 at 2:33 AM

    Why do we multiply 1.08 as 8% rate for the second year. Shouldn’t it be 2.08x * 0.08?

    Reply
    • GMAT Quantum says

      November 14, 2019 at 5:45 AM

      In general if a quantity $n$ is increased by say $7$ percent, then the outcome is the sum of the original $n$ and the increment, which is $0.07n$, and this yields $1.07n$. Essentially we are saying that with a $7$ percent increase the original quantity is now $107$ percent of the original.

      In this particular question, the quantity $(2.08x)(0.08)$ you mentioned is the increment and this needs to be added to the balance of $2.08x$, which is equivalent to $(2.08x)(1.08)$. I hope this makes sense.

      Reply

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