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Moderate

Formulas: Find Interest

GMAT-1LETWC

INSTRUCTIONS

This data sufficiency problem consists of a question and two statements, labeled (1) and (2), in which certain data are given. You have to decide whether the data given in the statements are sufficient for answering the question. Using the data given in the statements, plus your knowledge of mathematics and everyday facts, you must indicate whether:

  • Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient to answer the question asked.

  • Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient to answer the question asked.

  • BOTH statements (1) and (2) TOGETHER are sufficient to answer the question asked, but NEITHER statement ALONE is sufficient to answer the question asked.

  • EACH statement ALONE is sufficient to answer the question asked.

  • Statements (1) and (2) TOGETHER are NOT sufficient to answer the question asked, and additional data specific to the problem are needed.

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QUESTION

The formula for the amount of money in a bank account, compounded continuously is:

$$A=Pe^{rt}$$

Where $A$ is the amount of money in the account, $P$ is the principle (starting money at time 0), $e$ is a constant, $r$ is the interest rate, and $t$ is the amount of time (measured in years).

What is the interest rate?

(1) Tim puts some money in a bank account. $5$ years later, he has $\$1000$. After $2$ more years, he has $\$1200$.

(2) Jim puts $\$1000$ in a bank account. Over the next $3$ years, he makes several withdrawals totaling $\$500$. At the end of $3$ years, he has $\$550$ in the account.

A

Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient to answer the question asked.

B

Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient to answer the question asked.

C

BOTH statements (1) and (2) TOGETHER are sufficient to answer the question asked, but NEITHER statement ALONE is sufficient.

D

EACH statement ALONE is sufficient to answer the question asked.

E

Statement (1) and (2) TOGETHER are NOT sufficient to answer the question asked, and additional data are needed.