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B
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Difficulty:
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Question Stats:
82% (02:21) correct
18%
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Bob invested $2000 in fund A and $1000 in fund B. Over the next two years, the money in Fund A earned a total interest of 12 percent for the two years combined and the money in fund B earned 30 percent annual interest compounded annually. Two years after bob made these investments. Bob's investment in fund A was worth how much more than his investment in fund B?
A. $500
B. $550
C. $600
D. $650
E. $700
A. $500
B. $550
C. $600
D. $650
E. $700
Updated on: 16 Oct 2018, 18:30
Originally posted by ScottTargetTestPrep on 18 Jan 2018, 14:15.
Last edited by ScottTargetTestPrep on 16 Oct 2018, 18:30, edited 2 times in total.
Last edited by ScottTargetTestPrep on 16 Oct 2018, 18:30, edited 2 times in total.
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RSOHAL
The interest earned in fund A was 2,000 x 0.12 = 240 dollars, bringing his total investment in fund A to 2,240 dollars.
Using the formula for compound interest, the final value of investment B after 2 years was:
Final value = 1,000(1 + 0.3)^2
Final value = 1,000(1.3)^2
Final Value = 1,000(1.69) = 1,690
Thus, fund A was worth 2,240 - 1,690 = 550 dollars more than fund B.
Answer: B
25 Sep 2025, 02:12
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I am not able to conclude how fund A is Simple Interest; Can anyone help?
