Author 
Message 
TAGS:

Hide Tags

Intern
Joined: 03 Dec 2010
Posts: 30

A total of $20,000 was invested in two certificates of depos
[#permalink]
Show Tags
05 Apr 2011, 14:37
Question Stats:
81% (02:29) correct 19% (02:37) wrong based on 288 sessions
HideShow timer Statistics
A total of $20,000 was invested in two certificates of deposit at simple annual interest rates of 6 percent and 8 percent, respectively. If the total interest on the two certificates was $1,440 at the end of one year, what fractional part of the $20.000 was invested at the higher rate? (A) 3/8 (B) 2/5 (C) 1/2 (D) 3/5 (E) 3/4
Official Answer and Stats are available only to registered users. Register/ Login.




Veritas Prep GMAT Instructor
Joined: 16 Oct 2010
Posts: 10666
Location: Pune, India

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 17:26
Acer86 wrote: A total of $20,000 was invested in two certificates of deposit at simple annual interest rates of 6 percent and 8 percent, respectively. If the total interest on the two certificates was $1,440 at the end of one year, what fractional part of the $20.000 was invested at the higher rate? (A) 3/8 (B) 2/5 (C) 1/2 (D) 3/5 (E) 3/4 You can use weighted average in this question. One amount is deposited at 6% and another at 8%. The overall interest rate is \((\frac{1440}{20,000})*100 = 7.2%\) \(\frac{w1}{w2}= \frac{(8  7.2)}{(7.2  6)} = \frac{2}{3}\) So 2/5 of the 20,000 was invested at 6% and 3/5 was invested at 8%. For explanation of the formula used above, see: http://www.veritasprep.com/blog/2011/03 ... averages/and http://www.veritasprep.com/blog/2011/04 ... gebrutes/
_________________
Karishma Veritas Prep GMAT Instructor
Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options >




Intern
Affiliations: ACCA
Joined: 17 Apr 2010
Posts: 30
Schools: IMD, Insead, LBS, IE, Cambridge, Oxford

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 14:48
D 1440/20000*100%=7.2 7.26=1.2 86=2 1.2/2=3/5 D
Sent from my X10i using Tapatalk



Intern
Affiliations: ACCA
Joined: 17 Apr 2010
Posts: 30
Schools: IMD, Insead, LBS, IE, Cambridge, Oxford

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 14:48
D 1440/20000*100%=7.2 7.26=1.2 86=2 1.2/2=3/5 D
Sent from my X10i using Tapatalk



Retired Moderator
Joined: 20 Dec 2010
Posts: 1463

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 14:52
Acer86 wrote: A total of $20,000 was invested in two certificates of deposit at simple annual interest rates of 6 percent and 8 percent, respectively. If the total interest on the two certificates was $1,440 at the end of one year, what fractional part of the $20.000 was invested at the higher rate? (A) 3/8 (B) 2/5 (C) 1/2 (D) 3/5 (E) 3/4 Let "$x" be invested with the higher rate of 8% Thus, "20000x" must have been invested with lower rate of 6% Simple Interest = Principal* Rate* Time For the Amount invested at 8% Principal = x Rate = 0.08 Time = 1 Simple Interest = x* 0.08* 1= 0.08x For the Amount invested at 6% Principal = 20000x Rate = 0.06 Time = 1 Simple Interest = (20000x)* 0.06* 1= 12000.06x Total Interest = $1440 0.08x+12000.06x=1440 0.02x=240 x = 240/0.02=12000 Fraction of x per total amount = 12000/20000 = 12/20 = 3/5 Ans: "D"



Manager
Joined: 11 Dec 2010
Posts: 102
WE: Consulting (Consulting)

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 17:32
VeritasPrepKarishma wrote: Known as Alligation technique...
Attachments
Pic016.gif [ 7.01 KiB  Viewed 5891 times ]



Retired Moderator
Joined: 16 Nov 2010
Posts: 1163
Location: United States (IN)
Concentration: Strategy, Technology

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 18:05
x * 6/100 * 1 + (20000  x) * 8/100 * 1 = 1440 6x  8x = 144000  160000 => 2x = 16000 => x = 8000 So 12000/20000 = 3/5 Answer  D
_________________
Formula of Life > Achievement/Potential = k * Happiness (where k is a constant) GMAT Club Premium Membership  big benefits and savings



Manager
Joined: 16 Mar 2011
Posts: 144

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 18:07
VeritasPrepKarishma wrote: Acer86 wrote: A total of $20,000 was invested in two certificates of deposit at simple annual interest rates of 6 percent and 8 percent, respectively. If the total interest on the two certificates was $1,440 at the end of one year, what fractional part of the $20.000 was invested at the higher rate? (A) 3/8 (B) 2/5 (C) 1/2 (D) 3/5 (E) 3/4 You can use weighted average in this question. One amount is deposited at 6% and another at 8%. The overall interest rate is \((\frac{1440}{20,000})*100 = 7.2%\) \(\frac{w1}{w2}= \frac{(8  7.2)}{(7.2  6)} = \frac{2}{3}\) So 2/5 of the 20,000 was invested at 6% and 3/5 was invested at 8%. For explanation of the formula used above, see: http://www.veritasprep.com/blog/2011/03 ... averages/and http://www.veritasprep.com/blog/2011/04 ... gebrutes/i didnt know this technique... very good and efficient...



Manager
Joined: 09 Aug 2010
Posts: 72

Re: Rate problem
[#permalink]
Show Tags
05 Apr 2011, 18:32
Acer86 wrote: A total of $20,000 was invested in two certificates of deposit at simple annual interest rates of 6 percent and 8 percent, respectively. If the total interest on the two certificates was $1,440 at the end of one year, what fractional part of the $20.000 was invested at the higher rate? (A) 3/8 (B) 2/5 (C) 1/2 (D) 3/5 (E) 3/4 My Solution: Interest Earned = Principal * Rate * Time x + y = 20,000 .06x + .08y = 1,440 Combine equations: .06(20,000  y) + .08y = 1,440 1200  .06y + .08y = 1440 .02y = 240 2y = 24,000 y = 12,000 12,000 / 20,000 = 6/10 = 3/5



Senior Manager
Joined: 01 Feb 2011
Posts: 490

Re: Rate problem
[#permalink]
Show Tags
17 Apr 2011, 16:51
8x/100 + (20000  x) (6/100) = 1440 => x = 12000 Which is a fraction of 12000/20000 I.e 3/5
Answer is D.
Posted from my mobile device



Director
Joined: 23 Jan 2013
Posts: 505

Re: A total of $20,000 was invested in two certificates of depos
[#permalink]
Show Tags
01 Dec 2014, 07:10
Acer86 wrote: A total of $20,000 was invested in two certificates of deposit at simple annual interest rates of 6 percent and 8 percent, respectively. If the total interest on the two certificates was $1,440 at the end of one year, what fractional part of the $20.000 was invested at the higher rate?
(A) 3/8 (B) 2/5 (C) 1/2 (D) 3/5 (E) 3/4 Backsolving as option 1) take C to get that 1/2*20000=10000*8/100=800 and 1/2*20000=10000*6/100=600, so 800+600=1400 less than given. Eliminate A,B,C 2) go D to take 3/5*20000=12000*8/100=960 and 8000*6/100=480, so 960+480=1440. It is correct D



SVP
Status: The Best Or Nothing
Joined: 27 Dec 2012
Posts: 1706
Location: India
Concentration: General Management, Technology
WE: Information Technology (Computer Software)

Re: A total of $20,000 was invested in two certificates of depos
[#permalink]
Show Tags
01 Dec 2014, 23:29
...................... 6% .................... 8% ............ Total
Principle ........ 20000x ................ x .............. 20000
Interest ......... \((20000x)\frac{6}{100}\) ..... \(\frac{8x}{100}\) ....... 1440
\(\frac{(20000x)6}{100} + \frac{8x}{100} = 1440\)
120000  6x + 8x = 144000
x = 7200060000 = 12000
Fraction \(= \frac{12000}{24000} = \frac{3}{5}\)
Answer = D



NonHuman User
Joined: 09 Sep 2013
Posts: 15428

Re: A total of $20,000 was invested in two certificates of depos
[#permalink]
Show Tags
25 Jul 2017, 04:32
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: A total of $20,000 was invested in two certificates of depos
[#permalink]
25 Jul 2017, 04:32




