Interest (GMAT Focus Edition – Quantitative Reasoning Content and Tactics)
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Simple Interest
Percentage of Interest Accrued Occurs at a Defined Interval of Time
Starting Principal Accruing Interest Never Resets
Finding Amount Resulting from Simple Interest : A = P(1 + RT)
A = Amount
P = Starting Principal
R = Interest Rate
T = Interval at Which Amount is Withdrawn
Strategic Implications
Do Not Improperly Reset Principal
Manually Calculate If Any Doubt About Methodof Applying Formula
Consider Alternative Tactics to Maximize Efficiency
Compound Interest
Percentage of Interest Accrued Occurs at a Defined Interval of Time
Principal Value Accruing Interest Resets at a Defined Interval of Time
Finding Amount Resulting from Compound Interest : A = P(1 + R)^T
A = Amount
P = Starting Principal
R = Interest Rate
T = Number of Intervals at Which Amount Compounds
Strategic Implications
Note Time Interval of Accrual
Default to Manually Calculating Compound Interestto Avoid Onerous Technical Calculation
Consider Alternative Tactics to Maximize Efficiency
