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

 It is currently 24 May 2016, 01:09

### 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

### Show Tags

03 Sep 2012, 05:47
1
KUDOS
Expert's post
3
This post was
BOOKMARKED
00:00

Difficulty:

5% (low)

Question Stats:

79% (02:23) correct 21% (01:21) wrong based on 770 sessions

### HideShow timer Statistics

Lucy invested $10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today? (A)$10,350
(B) $10,395 (C)$10,500
(D) $11,500 (E)$12,705

Practice Questions
Question: 31
Page: 156
Difficulty: 600
[Reveal] Spoiler: OA

_________________
Math Expert
Joined: 02 Sep 2009
Posts: 32959
Followers: 5743

Kudos [?]: 70334 [5] , given: 9843

Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink] ### Show Tags 03 Sep 2012, 05:47 5 This post received KUDOS Expert's post 1 This post was BOOKMARKED SOLUTION Lucy invested$10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today?

(A) $10,350 (B)$10,395
(C) $10,500 (D)$11,500
(E) $12,705 The value of the account today would be $$10,000*1.1*1.05*0.9$$. Now, the question is how to calculate this efficiently. $$10,000*1.1*1.05*0.9=10,000*\frac{11}{10}*\frac{105}{100}*\frac{9}{10}=10,000*\frac{11*105*9}{10,000}$$ --> 10,000 will cancel and we'll get: $$11*105*9=(9*11)*105=99*105=(100-1)*105=10,500-105=10,395$$. Answer: B. _________________ Intern Joined: 28 Aug 2012 Posts: 46 Location: Austria GMAT 1: 770 Q51 V42 Followers: 3 Kudos [?]: 39 [0], given: 3 Re: Lucy invested$10,000 in a new mutual fund account exactly [#permalink]

### Show Tags

03 Sep 2012, 06:07
Value after 1 year: 10,000 * 1.1 = 11,000
Value after 2 years: 11,000 * 1.05 = 11,550
Value today: 11,550 * 0.9 = 10,395

The first equation is easy. In the second, first calculate 10% (1,100) and divide that by 2 (550). Add that to 11,000.
In the final equation, calculate 10% again (1,155) and subtract it from 11,550.
Senior Manager
Joined: 15 Jun 2010
Posts: 368
Schools: IE'14, ISB'14, Kellogg'15
WE 1: 7 Yrs in Automobile (Commercial Vehicle industry)
Followers: 10

Kudos [?]: 294 [2] , given: 50

Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink] ### Show Tags 03 Sep 2012, 06:51 2 This post received KUDOS Bunuel wrote: Lucy invested$10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today?

(A) $10,350 (B)$10,395
(C) $10,500 (D)$11,500
(E) $12,705 This is a question of successive % change. This question ultimately reduces to a multiplication problem. Final value after successive % change on$10,000 = $10,000 X 1.1 X 1.05 X .9 1.1 X 1.05 X .9 = 1.0395 Answer is B) _________________ Regards SD ----------------------------- Press Kudos if you like my post. Debrief 610-540-580-710(Long Journey): from-600-540-580-710-finally-achieved-in-4th-attempt-142456.html Manager Joined: 12 Mar 2012 Posts: 171 Location: India Concentration: Technology, General Management GMAT Date: 07-23-2012 WE: Programming (Telecommunications) Followers: 0 Kudos [?]: 43 [0], given: 4 Re: Lucy invested$10,000 in a new mutual fund account exactly [#permalink]

### Show Tags

03 Sep 2012, 07:45
I also followed the same approach and got the answer as B.
But I am wondering if there is any better method of calculating in any problem with successive year interest rates given.
_________________

FOCUS..this is all I need!

Ku-Do!

Math Expert
Joined: 02 Sep 2009
Posts: 32959
Followers: 5743

Kudos [?]: 70334 [0], given: 9843

Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink] ### Show Tags 07 Sep 2012, 03:06 Expert's post 1 This post was BOOKMARKED SOLUTION Lucy invested$10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today?

(A) $10,350 (B)$10,395
(C) $10,500 (D)$11,500
(E) $12,705 The value of the account today would be $$10,000*1.1*1.05*0.9$$. Now, the question is how to calculate this efficiently. $$10,000*1.1*1.05*0.9=10,000*\frac{11}{10}*\frac{105}{100}*\frac{9}{10}=10,000*\frac{11*105*9}{10,000}$$ --> 10,000 will cancel and we'll get: $$11*105*9=(9*11)*105=99*105=(100-1)*105=10,500-105=10,395$$. Answer: B. Kudos points given to everyone with correct solution. Let me know if I missed someone. _________________ Manager Joined: 20 Nov 2010 Posts: 224 Followers: 4 Kudos [?]: 14 [1] , given: 38 Re: Lucy invested$10,000 in a new mutual fund account exactly [#permalink]

### Show Tags

07 Sep 2012, 21:56
1
KUDOS
10000 + 1000 = 11000
11000 + 550 = 11550
11550 * 0.9 = 10395
(B)
_________________

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
MGMAT 6 650 (51,31) on 31/8/11
MGMAT 1 670 (48,33) on 04/9/11
MGMAT 2 670 (47,34) on 07/9/11
MGMAT 3 680 (47,35) on 18/9/11
GMAT Prep1 680 ( 50, 31) on 10/11/11

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CR notes
http://gmatclub.com/forum/massive-collection-of-verbal-questions-sc-rc-and-cr-106195.html#p832142
http://gmatclub.com/forum/1001-ds-questions-file-106193.html#p832133
http://gmatclub.com/forum/gmat-prep-critical-reasoning-collection-106783.html
http://gmatclub.com/forum/how-to-get-6-0-awa-my-guide-64327.html
http://gmatclub.com/forum/how-to-get-6-0-awa-my-guide-64327.html?hilit=chineseburned

Intern
Joined: 14 Jul 2012
Posts: 3
Followers: 0

Kudos [?]: 6 [1] , given: 0

### Show Tags

15 Dec 2012, 12:14
Bunuel wrote:
SOLUTION

Lucy invested $10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today? (A)$10,350
(B) $10,395 (C)$10,500
(D) $11,500 (E)$12,705

The value of the account today would be $$10,000*1.1*1.05*0.9$$. Now, the question is how to calculate this efficiently.

$$10,000*1.1*1.05*0.9=10,000*\frac{11}{10}*\frac{105}{100}*\frac{9}{10}=10,000*\frac{11*105*9}{10,000}$$ --> 10,000 will cancel and we'll get: $$11*105*9=(9*11)*105=99*105=(100-1)*105=10,500-105=10,395$$.

Thank you for the answer Bunuel, but i was just wondering. When you chose the denominators for the different fractions, was your goal to get 10 000 in the denominator so we could cancel Lucy's initial investment? Smart move by the way
Intern
Joined: 24 Apr 2012
Posts: 48
Followers: 0

Kudos [?]: 21 [1] , given: 1

### Show Tags

02 May 2013, 11:12
.10x10,000= $1,000 end of y1 = 11,000 .05x11,000=$550.00 end of y2 = 11,550
.10x11,550= 1,150 -1,155
(subtract y2 with the loss of y3) end of y3= 10,395
GMAT Club Legend
Joined: 09 Sep 2013
Posts: 9607
Followers: 465

Kudos [?]: 120 [0], given: 0

### Show Tags

06 Aug 2014, 11:49
We can use successive percentage formula : a+b + ab/100

so in the first two years it will increase 10 + 5 + 10*5/100 = 15.5

and in the second and third year it will be : 15.5 - 10 - 15.5*10/100 = 3.95

so finally the investment will increase by 3.95 %
Current Student
Joined: 21 Oct 2013
Posts: 194
Location: Germany
GMAT 1: 660 Q45 V36
GPA: 3.51
Followers: 1

Kudos [?]: 26 [0], given: 19

### Show Tags

10 Sep 2014, 03:43
Bunuel wrote:
Lucy invested $10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today? (A)$10,350
(B) $10,395 (C)$10,500
(D) $11,500 (E)$12,705

Practice Questions
Question: 31
Page: 156
Difficulty: 600

10,000*1.1--> 10% increase in the first year.
11000*1.05 --> 5% increase in second year
10% decrease from 11550 --> 10395
Intern
Joined: 06 Nov 2014
Posts: 13
Followers: 0

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

### Show Tags

20 Nov 2014, 01:50
1
KUDOS
Say initial value = 100 (avoiding 2 extra 00)

1st Yr >> 10% increase = 100 + 10 = 110

2nd Yr >> 5% increase = 110 + 5.5 = 115.5

3rd Yr >> 10% decrease = 115.5 - 11.55 = 103.95

Resultant = 103.95 * 100 = 10395

_________________

Kindly press "+1 Kudos" to appreciate

Joined: 27 Sep 2015
Posts: 63
GMAT 1: 410 Q33 V13
WE: Management Consulting (Computer Software)
Followers: 4

Kudos [?]: 30 [0], given: 26

Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink] ### Show Tags 19 Dec 2015, 09:19 year 1 Increases 10% 1000 Value became 11000 Year 2 increase 5% 550 value became 11550 Year 3 decrease 10% 1155 value became 11550-1155 =$10395.
_________________

Discipline does not mean control. Discipline means having the sense to do exactly what is needed.

Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink] 19 Dec 2015, 09:19 Similar topics Replies Last post Similar Topics: 1 Jaya invests in a new mutual fund. The fund averages 10% growth annual 4 28 Feb 2016, 09:49 4 Lucy deposited$62500 in an investment fund that provided 16 percent 2 10 Jan 2016, 07:46
4 Michele invests some of her money in a mutual fund that 3 22 Mar 2013, 00:59
11 Jill invests $10000 in an account that pays an annual rate 7 24 Jan 2013, 18:09 9 John deposited$10,000 to open a new savings account that 5 15 Sep 2009, 14:11
Display posts from previous: Sort by