Don’t lose your progress!

We cover every section of the GMAT with in-depth lessons, 5000+ practice questions and realistic practice tests.

Up to 90+ points GMAT score improvement guarantee

The best guarantee you’ll find

Our Premium and Ultimate plans guarantee up to 90+ points score increase or your money back.

Master each section of the test

Comprehensive GMAT prep

We cover every section of the GMAT with in-depth lessons, 5000+ practice questions and realistic practice tests.

Schedule-free studying

Learn on the go

Study whenever and wherever you want with our iOS and Android mobile apps.

The most effective way to study

Personalized GMAT prep, just for you!

Adaptive learning technology focuses on your academic weaknesses.

Interest: Compound Interest

Molly's bank pays 10% compound interest on savings annually. Molly deposited $10,000 in her account at the start of last year, another $10,000 at the start of this year, and plans to deposit $10,000 more at the start of next year. If she makes no other deposits to or withdrawals from the account, what will be her balance at the end of next year?
Incorrect. [[Snippet]] Since Molly's deposits alone amount to $30,000 in three years, this answer choice is too small. __POE__ and move on.
Incorrect. [[Snippet]] Since Molly's deposits alone amount to $30,000 in three years, this answer choice is too small. __POE__ and move on.
Incorrect. [[Snippet]] This answer choice is actually Molly's opening balance next year. Since Molly's deposits alone amount to $30,000 in three years, this answer choice is too small. __POE__ and move on.
Incorrect. [[Snippet]]
Correct. [[Snippet]] Last year, Molly deposited $10,000 so she earned >$$\text{Interest}_1 = \text{Principal} \times \text{Interest rate} \times \text{Time}$$ >$$\text{Interest}_1 = \$10{,}000 \times 0.1 \times 1$$ >$$\text{Interest}_1 = \$1{,}000$$. This year, her opening balance was $$\$10{,}000 + \$1{,}000 = \$11{,}000$$, and she deposited $10,000. So interest earned this year will be applicable to $$\$11{,}000 + \$10{,}000 = $21{,}000$$. >$$\text{Interest}_2 = \$21{,}000 \times 0.1 \times 1$$ >$$\text{Interest}_2 = \$2{,}100$$ Next year, her opening balance will be $$\$21{,}000 + \$2{,}100 = $23{,}100$$, and she will deposit $10,000. So interest earned this year will be applicable to $$\$23{,}100 + \$10{,}000 = \$33{,}100$$. >$$\text{Interest}_3 = \$33{,}100 \times 0.1 \times 1$$ >$$\text{Interest}_3 = \$3{,}310$$ Hence, her balance at the end of next year will be $$\$33{,}100 + \$3{,}310 = \$36{,}410$$.
$28,075
$29,500
$33,100
$36,410
$39,720