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You are here: Home » GMAT Test Prep Questions » Simple & Compound Interest » Question 1

The question given below is a problem solving question in Simple Interest.

Braun invested a certain sum of money at 8% p.a. simple interest for 'n' years. At the end of 'n' years, Braun got back 4 times his original investment. What is the value of n?

1. 50 years
2. 25 years
3. 12 years 6 months
4. 37 years 6 months
5. 40 years

The correct choice is (D) and the correct answer is 37 years 6 months.

Let us say Braun invested $100.

Then, at the end of 'n' years he would have got back $400.

Therefore, the Simple Interest earned = 400 - 100 = $300.

We know that Simple Interest =

Substituting the values in the above equation we get 300 =

Or 8n = 300

Or n = 37.5 years.