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Ann deposited money into two new accounts, A and B. Account [#permalink]

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15 Jan 2012, 23:49

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Ann deposited money into two new accounts, A and B. Account A earns 5 percent simple annual interest and account B earns 8 percent simple annual interest. If there were no other transactions in the two accounts, then the amount of interest that account B earned in the first year was how many dollars greater than the amount of interest that account A earned in the first year?

(1) Ann deposited $200 more in account B than in account A. (2) The total amount of interest that the two accounts earned in the first year was $120.

Re: Ann deposited money into two new accounts, A and B... [#permalink]

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16 Jan 2012, 02:26

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Account A earns 5 percent simple annual interest (Ra) and account B earns 8 percent simple annual interest(Rb).

Interest = (principal amount x rate x time in year) /100 interest calculated on A (Ia)= AxRaX1 /100 =0.05A interest calculated on B (Ib)= BxRbX1 /100 =0.08B

form statement 1: (1) Ann deposited $200 more in account B than in account A. or, B-200 = A or, B-A = 200

putting B-A = 200 in above equation, we can get the interest in terms of A or B only. so, we cannot find that how many dollars greater than the amount of interest that account A earned in the first year.

NOT SUFFICIENT

(2) The total amount of interest that the two accounts earned in the first year was $120.

Ia+Ib = 120 or, 0.05A + 0.08B = 120 we don't know the value of A & B . hence, NOT Sufficient.

On combining both statement: B-A = 200 & 0.05A + 0.08B = 120

here on solving, we can get individual value of A & B. and also the interest values.

Hence, Sufficient.

ANS IS C.

HOPE IT WILL
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Attitude determine everything. all the best and God bless you.

Last edited by 321kumarsushant on 16 Jan 2012, 04:43, edited 1 time in total.

Ann deposited money into two new accounts, A and B. Account A earns 5 percent simple annual interest and account B earns 8 percent simple annual interest. If there were no other transactions in the two accounts, then the amount of interest that account B earned in the first year was how many dollars greater than the amount of interest that account A earned in the first year?

(1) Ann deposited $200 more in account B than in account A. (2) The total amount of interest that the two accounts earned in the first year was $120.

I must be an idiot, because the answer is C (both statements together are sufficient). Walk me through the formula?

Let the amount Ann deposited into the accounts A and B be \(a\) and \(b\) respectively. Question: \(0.08b-0.05a=?\)

(1) Ann deposited $200 more in account B than in account A --> \(b=a+200\). Not sufficient.

(2) The total amount of interest that the two accounts earned in the first year was $120 --> \(0.05a+0.08b=120\). Not sufficient.

(1)+(2) We have two distinct, linear equations with two unknowns: \(b=a+200\) and \(0.08b+0.05a=120\), thus we can solve it and get the value of \(0.08b-0.05a\) (so save time, as no need of actual solving). Sufficient.

Re: Ann deposited money into two new accounts, A and B... [#permalink]

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22 May 2013, 15:28

Bunuel wrote:

vandygrad11 wrote:

Ann deposited money into two new accounts, A and B. Account A earns 5 percent simple annual interest and account B earns 8 percent simple annual interest. If there were no other transactions in the two accounts, then the amount of interest that account B earned in the first year was how many dollars greater than the amount of interest that account A earned in the first year?

(1) Ann deposited $200 more in account B than in account A. (2) The total amount of interest that the two accounts earned in the first year was $120.

I must be an idiot, because the answer is C (both statements together are sufficient). Walk me through the formula?

Let the amount Ann deposited into the accounts A and B be \(a\) and \(b\) respectively. Question: \(0.08b-0.05a=?\)

(1) Ann deposited $200 more in account B than in account A --> \(b=a+200\). Not sufficient.

(2) The total amount of interest that the two accounts earned in the first year was $120 --> \(0.05a+0.08b=120\). Not sufficient.

(1)+(2) We have two distinct, linear equations with two unknowns: \(b=a+200\) and \(0.08b+0.05a=120\), thus we can solve it and get the value of \(0.08b-0.05a\) (so save time, as no need of actual solving). Sufficient.

Answer: C.

Yeah i didnt bother to solve either i just saw it was solvable and went for C

Re: Ann deposited money into two new accounts, A and B. Account [#permalink]

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23 Nov 2014, 06:33

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Re: Ann deposited money into two new accounts, A and B. Account [#permalink]

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05 Dec 2015, 08:17

Hello from the GMAT Club BumpBot!

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Forget conventional ways of solving math questions. In DS, Variable approach is the easiest and quickest way to find the answer without actually solving the problem. Remember equal number of variables and independent equations ensures a solution.

Ann deposited money into two new accounts, A and B. Account A earns 5 percent simple annual interest and account B earns 8 percent simple annual interest. If there were no other transactions in the two accounts, then the amount of interest that account B earned in the first year was how many dollars greater than the amount of interest that account A earned in the first year?

(1) Ann deposited $200 more in account B than in account A. (2) The total amount of interest that the two accounts earned in the first year was $120.

There are 3 variables (original money, interest rate, time period) in questions regarding compound and and simple accounts For this question above, the time period is told to be 1 year, and the interest rates are told to be 5% and 8% respectively, so we only need to know the original money, which means there are 2 variables (A,B) and 2 equations are given by the 2 conditions, so there is high chance (C) will become the answer. Looking at the conditions together, from B=A+200, A*5%+B*8%=120, we can derive an unique answer for the interests, so the conditions are sufficient and the answer becomes (C).

For cases where we need 2 more equations, such as original conditions with “2 variables”, or “3 variables and 1 equation”, or “4 variables and 2 equations”, we have 1 equation each in both 1) and 2). Therefore, there is 70% chance that C is the answer, while E has 25% chance. These two are the majority. In case of common mistake type 3,4, the answer may be from A, B or D but there is only 5% chance. Since C is most likely to be the answer using 1) and 2) separately according to DS definition (It saves us time). Obviously there may be cases where the answer is A, B, D or E.
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Re: Ann deposited money into two new accounts, A and B. Account [#permalink]

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29 Dec 2016, 20:17

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.
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