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Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
 03 Sep 2012, 05:47
Question Stats:
78% (02:11) correct
21% (01:07) wrong based on 19 sessions
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
03 Sep 2012, 05:47
SOLUTIONLucy 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.
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
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
Answer B is correct.
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.
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
03 Sep 2012, 06:51
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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)
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
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.
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
07 Sep 2012, 03:06
SOLUTIONLucy 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.
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DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS ; 9 Devil's Dozen!!!; 10 Number Properties set. NEW!!!
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
07 Sep 2012, 21:56
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
19 Oct 2012, 02:06
Stupid lucy! If she sees that there is a crisis in the world and her accounts diminishes every year, why hasn't she redraw her money after the second year?!?... I multiplied the last year with 1.1 instead of 0.9 and i got the D answear... This is lucy's fault! :D
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
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.
Answer: B. 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 
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
16 Dec 2012, 04:07
Ans:: the amount at the end of first year will become the principle for 2nd year, applying this trick and calculating we get the amount at the end of third year to be 10395. So the answer is (B).
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Re: Lucy invested $10,000 in a new mutual fund account exactly [#permalink]
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
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Re: Lucy invested $10,000 in a new mutual fund account exactly
[#permalink]
02 May 2013, 11:12
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