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# This year Henry will save a certain amount of his income,

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VP
Joined: 26 Apr 2004
Posts: 1225
Location: Taiwan
Followers: 2

Kudos [?]: 197 [0], given: 0

This year Henry will save a certain amount of his income, [#permalink]  22 Aug 2004, 18:08
00:00

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(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend.

In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?

A. 1/(r+2)
B. 1/(2r+2)
C. 1/(3r+2)
D. 1/(r+3)
E. 1/(2r+3)

Director
Joined: 20 Jul 2004
Posts: 593
Followers: 1

Kudos [?]: 54 [0], given: 0

Year------Income-------Savings------Spending Limit
1----------I---------------S--------------P
2----------0--------------0--------------S(1+r)

To find: Fraction of Savings to income this year = S/I.

Next year, the amount he will be able to spend will be equal to half the amount that he spends this year.
=> S(1+r)=P/2
=> S(1+r)=(I-S)/2

Solving this we get,
S/I = 1/(2r+3)
E.
VP
Joined: 26 Apr 2004
Posts: 1225
Location: Taiwan
Followers: 2

Kudos [?]: 197 [0], given: 0

The OA is (E)

well done.

Now, I can figure out. Thanks all.
Senior Manager
Joined: 25 Jul 2004
Posts: 274
Followers: 1

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

the equation method

S = saved amount
T = total

S(1 + r) = .5 (T - S)

Solve for S/T
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