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.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

25 Oct 2006, 08:22

1

This post received KUDOS

22

This post was BOOKMARKED

00:00

A

B

C

D

E

Difficulty:

95% (hard)

Question Stats:

57% (06:31) correct
43% (03:14) wrong based on 264 sessions

HideShow timer Statistics

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $605 as interest. What was the value of his total savings before investing in these two bonds?

Re: Shawn invested one half of his savings in a bond that paid [#permalink]

Show Tags

09 Nov 2013, 13:23

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

20 Nov 2013, 10:47

2

This post was BOOKMARKED

karlfurt wrote:

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $605 as interest. What was the value of his total savings before investing in these two bonds?

Let the total amount invested be 2x. Now, we know that from half of it, he got 275$ per year for 2 years, and from the other half he got a total of 605$ over 2 years as Cumulative interest. Now, the amount of interest he got from the second year of cumulative interest : 605-275 = 330$

Thus, if the rate be r, then \(r*x*(1+r)=330\).

Again, we know that\(2r*x = 550\),

Thus,\((1+r) = \frac{6}{5} \to r = \frac{1}{5}\)

Replacing this in the second equation, we get \(2x = \frac{550}{r} = 550*5 = 2750\)

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

20 Nov 2013, 17:59

mau5 wrote:

karlfurt wrote:

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $605 as interest. What was the value of his total savings before investing in these two bonds?

Let the total amount invested be 2x. Now, we know that from half of it, he got 275$ per year for 2 years, and from the other half he got a total of 605$ over 2 years as Cumulative interest. Now, the amount of interest he got from the second year of cumulative interest : 605-275 = 330$

Thus, if the rate be r, then \(r*x*(1+r)=330\).

Again, we know that\(2r*x = 550\),

Thus,\((1+r) = \frac{6}{5} \to r = \frac{1}{5}\)

Replacing this in the second equation, we get \(2x = \frac{550}{r} = 550*5 = 2750\)

A.

wait how did you know that \((1+r) = \frac{6}{5}\)

also where do you get \(2x = \frac{550}{r} = 550*5 = 2750\) from? Is there a lot of work you did in your head?

Because if you sub in 1/5 for R, then you end up with 2x=550/(1/5) and then 2x=2750, and x=1375, not 2750...

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

20 Nov 2013, 23:57

Please explain: Let the total amount invested be 2x. Now, we know that from half of it, he got 275$ per year for 2 years, and from the other half he got a total of 605$ over 2 years as Cumulative interest. Now, the amount of interest he got from the second year of cumulative interest : 605-275 = 330$

I do not understand the the underlined statement; how to get it? please explain. Thanks. Simple interest formula: I = PRt 550 = PR2 550/2P = R

Compound interest formula: P + I = P(1+R)^t P + 605 = P(1+R)^2 P + 605 = P(1 + 2(550/2P) + (550/2P)^2) P + 605 = P + 550/2 + (550)^2/ 4P 55 = (550)^2/4P P = 2750

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

21 Nov 2013, 00:05

1

This post received KUDOS

smartyman wrote:

Please explain: Let the total amount invested be 2x. Now, we know that from half of it, he got 275$ per year for 2 years, and from the other half he got a total of 605$ over 2 years as Cumulative interest. Now, the amount of interest he got from the second year of cumulative interest : 605-275 = 330$

I do not understand the the underlined statement; how to get it? please explain. Thanks.

Say you have 200 $. Half of it is getting you simple interest per year at 10% rate.Thus, the interest you earn for the first year : \(\frac{10}{100}*100 = 10 $\)

Now, the other half is getting you compound interest at 10%, where interest is again compounded annually.Thus, the interest from the first year : \(\frac{10}{100}*100 = 10 $\)

Now, suppose I told you that the total CI you got from the other half for 2 years was 40 $, then the interest you earned from the second year is nothing but : 40-10 = 30$

The same has been done above. Note that as the rate of interest and the time is the same for both CI and SI, the interest earned for the first year will be exactly same in either case.

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

09 Jan 2014, 06:30

1

This post was BOOKMARKED

karlfurt wrote:

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $605 as interest. What was the value of his total savings before investing in these two bonds?

I understand that the interest paid per year from the simple interest was $275 (i.e. 550/2) and that the second years payment for the second year of the compound interest is $330 (i.e. 605 - 275) and thus the rate is 20% because (330/275=1.2)

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $605 as interest. What was the value of his total savings before investing in these two bonds?

I understand that the interest paid per year from the simple interest was $275 (i.e. 550/2) and that the second years payment for the second year of the compound interest is $330 (i.e. 605 - 275) and thus the rate is 20% because (330/275=1.2)

but

after that....I AM LOST!!!!

HELP HELP HELP

So, we know that Shawn received 20% of the amount he invested in a year. We also know that in one year Shawn received $275, thud 0.2x = $275 --> x = $1,375.

Since, he invested equal sums in his 2 bonds, then his total savings before investing was 2*$1,375 = $2,700.

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

20 Feb 2015, 07:31

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

09 Apr 2015, 16:14

Bunuel wrote:

TroyfontaineMacon wrote:

karlfurt wrote:

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $605 as interest. What was the value of his total savings before investing in these two bonds?

I understand that the interest paid per year from the simple interest was $275 (i.e. 550/2) and that the second years payment for the second year of the compound interest is $330 (i.e. 605 - 275) and thus the rate is 20% because (330/275=1.2)

but

after that....I AM LOST!!!!

HELP HELP HELP

So, we know that Shawn received 20% of the amount he invested in a year. We also know that in one year Shawn received $275, thud 0.2x = $275 --> x = $1,375.

Since, he invested equal sums in his 2 bonds, then his total savings before investing was 2*$1,375 = $2,700.

Answer: A.

Hi bunuel,

I understand the solution for this particular question but how can I use a similar method if

We had the same question but instead of 2 years, it was 3 years investment ?

Is there a similar shortcut ? I tried to find it but could not

Re: Shawn invested one half of his savings in a bond that paid s [#permalink]

Show Tags

13 Apr 2016, 22:27

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________

This is the kickoff for my 2016-2017 application season. After a summer of introspect and debate I have decided to relaunch my b-school application journey. Why would anyone want...

Check out this awesome article about Anderson on Poets Quants, http://poetsandquants.com/2015/01/02/uclas-anderson-school-morphs-into-a-friendly-tech-hub/ . Anderson is a great place! Sorry for the lack of updates recently. I...

“Oh! Looks like your passport expires soon” – these were the first words at the airport in London I remember last Friday. Shocked that I might not be...