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

It is currently 24 Oct 2014, 17:29

Close

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
Your Progress

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

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Loan X has a principal of $10,000x and a yearly simple inter

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
2 KUDOS received
Intern
Intern
avatar
Joined: 24 Sep 2011
Posts: 18
Followers: 0

Kudos [?]: 32 [2] , given: 52

Loan X has a principal of $10,000x and a yearly simple inter [#permalink] New post 07 Aug 2013, 11:36
2
This post received
KUDOS
2
This post was
BOOKMARKED
Loan X has a principal of $10,000x and a yearly simple interest rate of 4%. Loan Y has a principal of $10,000y and a yearly simple interest rate of 8%. Loans X and Y will be consolidated to form Loan Z with a principal of $(10,000x + 10,000y) and a yearly simple interest rate of r%, where r = (4x+8y)/(x+y). In the table, select a value for x and a value for y corresponding to a yearly simple interest rate of 5% for the consolidated loan. Make only two selections, one in each column.

..........X..........Y..........Value
(A)..............................21
(B)..............................32
(C)..............................51
(D)..............................64
(E)..............................81
(F)..............................96


[Reveal] Spoiler:
X=(F), Y=(B)


Can someone please explain how to solve this?
13 KUDOS received
Current Student
avatar
Joined: 25 Jul 2012
Posts: 11
Concentration: Finance, Entrepreneurship
GPA: 3.56
Followers: 0

Kudos [?]: 18 [13] , given: 2

Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink] New post 07 Aug 2013, 13:49
13
This post received
KUDOS
2
This post was
BOOKMARKED
You have X amount of 4% interest rate and Y amount of 8%. After consolidating these two deposits, the formula to find the new interest rate(r%) of the consolidated amounts is:

r= (4x+8y)/(x+y)

the problem indicates the new interest rate(r%) of the mix is 5%
substituting r with 5,we get:

5=(4x+8y)/(x+y)

5x+5y=4x+8y

x=3y

After you get the above equation, you just need to look at your options for an x that is 3 times of y.
Y=32 X=96

Hope my first post helps.
Intern
Intern
avatar
Joined: 19 May 2012
Posts: 36
Location: India
Concentration: International Business, Healthcare
GMAT Date: 03-03-2014
WE: Information Technology (Computer Software)
Followers: 1

Kudos [?]: 7 [0], given: 0

Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink] New post 08 Aug 2013, 07:55
easy one....agree with the given solution....:)
_________________

Thanks
crazy4priya
GMATPrep 1 710/Q49/V38
GMATPrep 2 690/Q49/V34
Veritas Prep 700/Q50/V36/IR5
MGMT Test 1 700/Q51/V35/IR3

Expert Post
4 KUDOS received
Veritas Prep GMAT Instructor
User avatar
Joined: 11 Dec 2012
Posts: 313
Followers: 59

Kudos [?]: 191 [4] , given: 66

Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink] New post 08 Aug 2013, 10:24
4
This post received
KUDOS
Expert's post
ksung84 wrote:
Loan X has a principal of $10,000x and a yearly simple interest rate of 4%. Loan Y has a principal of $10,000y and a yearly simple interest rate of 8%. Loans X and Y will be consolidated to form Loan Z with a principal of $(10,000x + 10,000y) and a yearly simple interest rate of r%, where r = (4x+8y)/(x+y). In the table, select a value for x and a value for y corresponding to a yearly simple interest rate of 5% for the consolidated loan. Make only two selections, one in each column.

..........X..........Y..........Value
(A)..............................21
(B)..............................32
(C)..............................51
(D)..............................64
(E)..............................81
(F)..............................96


[Reveal] Spoiler:
X=(F), Y=(B)


Can someone please explain how to solve this?


This Integrated Reasoning Two-Part Analysis question can be broken down into a standard weighted-average question. Forgetting the 10,000 constant (which is only there to confuse you), you need to find the weighted average of x (4%) and y (8%) that comes up to 5%. The algebraic solution above is good, but you can also solve this through logic if you preferred. X brings down the average by 1, Y brings up the average by 3. Obviously there need to be more x's than y's, because the weighted average is closer to x. Hence we need 3 x's for every 1 y to end up at the weighted average given.

From there, you have to find answer choices that have a 3 to 1 ratio. Since there could be an infinite number of solutions, you know the GMAT will only give you one option among the answer choices that works. In this case 32 and 96. Again you need more x's than y's, so x is 96 and y is 32.

Quick takeaway here is that most of the concepts that you study for the GMAT are applied on the IR section as well. There isn't much new content to study (basically just graphics analysis), but sometimes you need to apply familiar concepts in new ways.

Hope this helps!
-Ron
_________________

Ron Awad
Veritas Prep | GMAT Instructor
Save $100 on Veritas Prep GMAT Courses and Admissions Consulting Services
Veritas Prep Reviews

Re: Loan X has a principal of $10,000x and a yearly simple inter   [#permalink] 08 Aug 2013, 10:24
    Similar topics Author Replies Last post
Similar
Topics:
11 On a certain date, Pat invested $10,000 at x percent annual arjtryarjtry 11 22 Jul 2008, 17:59
The principal of School X has proposed a plan that would add jimmyjamesdonkey 5 20 Jun 2008, 17:34
A credit card company has an yearly 'pay back' option on the withme 2 17 Jan 2007, 12:47
6 The principal has sought approval for her plan to grant patrickpui 57 03 Jan 2005, 21:22
The principal has sought approval for her plan to grant patrickpui 0 04 Jan 2005, 08:04
Display posts from previous: Sort by

Loan X has a principal of $10,000x and a yearly simple inter

  Question banks Downloads My Bookmarks Reviews Important topics  

Moderators: WoundedTiger, Bunuel



GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

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®.