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

 It is currently 05 Jul 2015, 21:20

### 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

Author Message
TAGS:
Manager
Joined: 23 Mar 2008
Posts: 220
Followers: 2

Kudos [?]: 40 [0], given: 0

Last year Luis invested x dollars for one year, half at 8 [#permalink]  18 Apr 2008, 07:58
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: 211 Concentration: Finance, Strategy Followers: 1 Kudos [?]: 40 [0], given: 1 Re: investment [#permalink] 18 Apr 2008, 08:49 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: 1463 Followers: 6 Kudos [?]: 143 [0], given: 0 Re: investment [#permalink] 18 Apr 2008, 12:54 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 [?]: 145 [0], given: 9

Re: investment [#permalink]  18 Apr 2008, 18:37
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, 18:37
Similar topics Replies Last post
Similar
Topics:
A total of $60,000 was invested for one year. Part of this 2 07 Oct 2008, 06:38 Pat invested x dollars in a fund that paid 8 % annual 0 12 Jul 2008, 08:44 If x dollars is invested at 10 percent for one year and y 2 16 Feb 2006, 21:37 A total of$60,000 was invested for one year. But of this 2 06 Feb 2006, 21:28
A total of \$60,000 was invested for one year. Part of this 1 30 Nov 2005, 23:59
Display posts from previous: Sort by