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A school must raise exactly $2,500 over the next year by investing a

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A school must raise exactly $2,500 over the next year by investing a [#permalink]

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New post 19 Mar 2017, 06:06
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A school must raise exactly $2,500 over the next year by investing a total of $30,000 in stocks, which yield 9% annual interest, and bonds, which yield 8% annual interest. If the school wants to invest as much as possible in stocks, then how much should the school invest in stocks?

A. $1,000
B. $10,000
C. $20,000
D. $29,000
E. $30,000
[Reveal] Spoiler: OA

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Kudos [?]: 135981 [0], given: 12719

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Re: A school must raise exactly $2,500 over the next year by investing a [#permalink]

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New post 19 Mar 2017, 06:50
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Bunuel wrote:
A school must raise exactly $2,500 over the next year by investing a total of $30,000 in stocks, which yield 9% annual interest, and bonds, which yield 8% annual interest. If the school wants to invest as much as possible in stocks, then how much should the school invest in stocks?

A. $1,000
B. $10,000
C. $20,000
D. $29,000
E. $30,000


let x be the amount to be invested in stocks

9x/100 + (8/100)*(30000-x) = 2500

9x + 240000 - 8x = 250000

x = 10000

Hence option B is correct
Hit Kudos if you liked it 8-)

Kudos [?]: 197 [1], given: 59

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Re: A school must raise exactly $2,500 over the next year by investing a [#permalink]

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New post 19 Mar 2017, 06:55
0akshay0 wrote:
Bunuel wrote:
A school must raise exactly $2,500 over the next year by investing a total of $30,000 in stocks, which yield 9% annual interest, and bonds, which yield 8% annual interest. If the school wants to invest as much as possible in stocks, then how much should the school invest in stocks?

A. $1,000
B. $10,000
C. $20,000
D. $29,000
E. $30,000


let x be the amount to be invested in stocks

9x/100 + (8/100)*(30000-x) = 2500

9x + 240000 - 8x = 250000

x = 10000

Hence option B is correct
Hit Kudos if you liked it 8-)

Could you please elaborate your approach?

Sent from my ONE E1003 using GMAT Club Forum mobile app

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

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Joined: 19 Apr 2016
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Kudos [?]: 197 [0], given: 59

Location: India
GMAT 1: 570 Q48 V22
GMAT 2: 640 Q49 V28
GPA: 3.5
WE: Web Development (Computer Software)
A school must raise exactly $2,500 over the next year by investing a [#permalink]

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New post 19 Mar 2017, 07:14
appu2693 wrote:
0akshay0 wrote:
Bunuel wrote:
A school must raise exactly $2,500 over the next year by investing a total of $30,000 in stocks, which yield 9% annual interest, and bonds, which yield 8% annual interest. If the school wants to invest as much as possible in stocks, then how much should the school invest in stocks?

A. $1,000
B. $10,000
C. $20,000
D. $29,000
E. $30,000


let x be the amount to be invested in stocks

9x/100 + (8/100)*(30000-x) = 2500

9x + 240000 - 8x = 250000

x = 10000

Hence option B is correct
Hit Kudos if you liked it 8-)

Could you please elaborate your approach?

Sent from my ONE E1003 using GMAT Club Forum mobile app



The school must raise exactly $2,500 by investing as much as possible in stocks.
I have assumed that amount to be x.

Investment in stocks yields 9% therefore the returns from this investment = 9x/100

The remaining amount i.e. (30000-x) is invested in bonds, which yield 8% annual interest. i.e. (8/100)*(30000-x)

The sum of the returns from both investments = 2500. So,

9x/100 + (8/100)*(30000-x) = 2500
x = 10000

therefore the school must invest 10000 in stocks to raise exactly $2,500 by investing as much as possible in stocks.

appu2693 : Hope its clear
Hit Kudos if you liked it 8-)

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A school must raise exactly $2,500 over the next year by investing a [#permalink]

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New post 13 Nov 2017, 23:51
One of the quickest way to solve this problem is using allegation.

If whole amount is invested in stock, the return: $30000*9% = $2700
If whole amount is invested in bond, the return: $30000*8% = $2400
But the return needed is exactly $2500

See attachment.

Hence the total amount needs to be invested in stock and bond in the ratio 1:2.
Therefore amount invested in stock is $30000*(1/3) = $10000.
Attachments

Capture.JPG
Capture.JPG [ 12.7 KiB | Viewed 132 times ]

Kudos [?]: 8 [0], given: 54

A school must raise exactly $2,500 over the next year by investing a   [#permalink] 13 Nov 2017, 23:51
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