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Loan X has a principal of $10,000x and a yearly simple inter [#permalink] ### Show Tags 07 Aug 2013, 11:36 3 This post received KUDOS 12 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?
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08 Aug 2013, 07:55
easy one....agree with the given solution....
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Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink] ### Show Tags 08 Aug 2013, 10:24 5 This post received KUDOS Expert's post 1 This post was BOOKMARKED 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
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27 Dec 2015, 09:24
lot of verbiage but as other have said easy, only thing to be solved that equation by setting it equal to 5%.
I agree with solution provided
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04 Feb 2016, 22:32
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Hi Frank22Times,

When deciding on how to represent an interest rate, you have to pay careful attention to what the prompt tells you.

If you were trying to calculate a basic interest, then you would almost certainly use a decimal point.

For example, 10% on a $200 load is (.10)($200) = $20 In this question though, we're told that a loan has an interest rate of R%. Notice how the % sign is already there - that means we should NOT use a decimal point. When we're told that R = (4x+8y)/(x+y), we're performing the specific calculation that's described in the prompt, so we need to use R=5 (and not R=.05). GMAT assassins aren't born, they're made, Rich _________________ # Rich Cohen Co-Founder & GMAT Assassin # Special Offer: Save$75 + GMAT Club Tests

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Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink] ### Show Tags 25 Sep 2016, 23:27 Weighted averages method is the best way to approach this questions. W1/W2 = (A2 - Average)/(Average - A1) This gives the ratio to be 3:1 32 and 96 _________________ Fais de ta vie un rêve et d'un rêve une réalité Re: Loan X has a principal of$10,000x and a yearly simple inter   [#permalink] 25 Sep 2016, 23:27
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