Find all School-related info fast with the new School-Specific MBA Forum

 It is currently 23 Oct 2016, 01:04

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Last year Luis invested x dollars for one year, half at 8

 post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
Manager
Joined: 23 Mar 2008
Posts: 219
Followers: 3

Kudos [?]: 139 [0], given: 0

Last year Luis invested x dollars for one year, half at 8 [#permalink]

### Show Tags

18 Apr 2008, 08:58
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

Last year Luis invested x dollars for one year, half at 8 percent simple annual interest and the other half at 12 percent simple annual interest. Now he wants to reinvest the x dollars for one year in the same two types of investments, but the lower rate has decreased. If the higher rate is unchanged , what fraction of the x dollars must be reinvested at the 12 percent rate so that the total interest earned from the x dollars will be the same for both years?

1) the lower rate is now 6%
2) the total amount of interest earned from the two investments last eyar was $3000 Manager Joined: 02 Mar 2008 Posts: 210 Concentration: Finance, Strategy Followers: 1 Kudos [?]: 44 [0], given: 1 Re: investment [#permalink] ### Show Tags 18 Apr 2008, 09:49 A last year: 8%*0.5x + 12%*0.5x 1) this year: 6%*kx + (1-k)x*12% equal 2 sides, we can solve for k : sufficient 2) the total amount does not help. we have 2 variables the ratio k and the new interest VP Joined: 10 Jun 2007 Posts: 1459 Followers: 7 Kudos [?]: 247 [0], given: 0 Re: investment [#permalink] ### Show Tags 18 Apr 2008, 13:54 puma wrote: Last year Luis invested x dollars for one year, half at 8 percent simple annual interest and the other half at 12 percent simple annual interest. Now he wants to reinvest the x dollars for one year in the same two types of investments, but the lower rate has decreased. If the higher rate is unchanged , what fraction of the x dollars must be reinvested at the 12 percent rate so that the total interest earned from the x dollars will be the same for both years? 1) the lower rate is now 6% 2) the total amount of interest earned from the two investments last eyar was$3000

A.

(1) Set n = fraction of x needed
Original interest earned = 0.12*(x/2) + 0.08*(x/2) = 0.1x
New interest = 0.12*(x/2 + nx) + 0.06*(x/2)
We want to same interest, so
0.1x = 0.12*(x/2 + nx) + 0.06*(x/2) = 0.06x + 0.12nx + 0.03x
0.1 = 0.06 + 0.12n + 0.03
We can find n, SUFFICIENT

(2) Without knowing the decreased rate, you cannot find how much more money you need. INSUFFICIENT
Director
Joined: 20 Feb 2008
Posts: 797
Location: Texas
Schools: Kellogg Class of 2011
Followers: 6

Kudos [?]: 146 [0], given: 9

### Show Tags

18 Apr 2008, 19:37
puma wrote:
Last year Luis invested x dollars for one year, half at 8 percent simple annual interest and the other half at 12 percent simple annual interest. Now he wants to reinvest the x dollars for one year in the same two types of investments, but the lower rate has decreased. If the higher rate is unchanged , what fraction of the x dollars must be reinvested at the 12 percent rate so that the total interest earned from the x dollars will be the same for both years?

1) the lower rate is now 6%
2) the total amount of interest earned from the two investments last eyar was $3000 A little more information on why #2 is wrong: Year 1 - 8%(x/2) + 12%(x/2) =$3,000
4%x + 6%x = $3,000 10%x =$3,000
x = $30,000 Year 2 - I%(x) + 12%(1-x) =$3,000

You have two variables I and x to solve for and thus #2 is unsolvable.
Re: investment   [#permalink] 18 Apr 2008, 19:37
Display posts from previous: Sort by

# Last year Luis invested x dollars for one year, half at 8

 post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.