A Sum of RS 12,000 Deposited at Compound Interest becomes Double after GMAT Problem Solving

Question: A sum of RS 12,000 deposited at compound interest becomes double after 5 years. After 20 years, it will become?

(A) RS 48,000
(B) RS 96,000
(C) RS 24,000
(D) RS 1,92,000
(E) RS 1,00,000

Correct Answer: D
Solution and Explanation:
Approach Solution 1:

The compound interest formula is -

P(1+R / 100) ^T
We may calculate the sum using the following formula: P = 12000, R = R, and T = 5.

We are informed that the principal doubles after five years, making the total amount equal to $24,000.
24000=12000×(1+R/100)^5
2=(1+R/100)^5

We must now determine the sum in 20 years.
The amount is therefore 12000* (1 + R /100)^20

Because we are aware of the value of (1+R/100)^5, breaking 20 equals 5*4.
= 12000×((1+R/100)^5)^4
= 12000×(2)^4
= 12000×16= 192000

D is the correct answer.

Approach Solution 2:

The balance in the account increases by a factor of two every five years.
The balance in the account will reach $24,000 after the first five years of its existence.
After an additional five years, or after ten years in total, the money will more than quadruple to $48,000.
After another 15 years, it will double again, reaching 96,000, and after another 20 years, it will double again, reaching 192,000.

As a result, the response that should be given is D.

“A sum of RS 12,000 deposited at compound interest becomes double after" - is a topic of the GMAT Quantitative reasoning section of GMAT. This question has been borrowed from the book “GMAT Official Guide Quantitative Review”.

To understand GMAT Problem Solving questions, applicants must possess fundamental qualitative skills. Quant tests a candidate's aptitude in reasoning and mathematics. The GMAT Quantitative test's problem-solving phase consists of a question and a list of possible responses. By using mathematics to answer the question, the candidate must select the appropriate response. The problem-solving section of the GMAT Quant topic is made up of very complicated math problems that must be solved by using the right math facts.

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