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07 Nov 2012, 05:54
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C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
68% (02:07) correct
32%
(01:51)
wrong
based on 163
sessions
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Not Attempted Yet
Exactly 6 years ago, James opened 2 salary accounts, with no further deposits nor withdrawals since then. Each account has earned simple interest, one at 3% per year and the other at 4% per year. Which account has more money now?
(1) When James opened the accounts, the account earning 3% interest contained $1,000 more than the account earning 4%.
(2) Last year, the account earning 3% earned exactly $150 in interest.
(1) When James opened the accounts, the account earning 3% interest contained $1,000 more than the account earning 4%.
(2) Last year, the account earning 3% earned exactly $150 in interest.
07 Nov 2012, 06:22
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Exactly 6 years ago, James opened 2 salary accounts, with no further deposits nor withdrawals since then. Each account has earned simple interest, one at 3% per year and the other at 4% per year. Which account has more money now?
Say the amount invested at 3% was $x and the amount invested at 4% was $y.
(1) When James opened the accounts, the account earning 3% interest contained $1,000 more than the account earning 4%. x=y+1,000. Check extreme cases: if y=0 and x=1,000, then the amount invested at 4% ($0) would still have $0 after 6 years, thus the amount invested at 3% ($1,000) would naturally have more money. But if y=1,000,000 and x=1,001,000, then even after one year the amount invested at 4% would have more money than the amount invested at 3% (1,000,000+40,000=1,040,000 and 1,001,000+30,000+30=1,031,030). Not sufficient.
(2) Last year, the account earning 3% earned exactly $150 in interest. Since accounts earn simple interest, then each account earns the same amount each year --> x*0.03=$150 --> we can find x but still not sufficient.
(1)+(2) Since from (2) we know the value of x, then from x=y+1,000 we can find the value of y, hence we can answer the question. Sufficient.
Answer: C.
Hope it's clear.
Say the amount invested at 3% was $x and the amount invested at 4% was $y.
(1) When James opened the accounts, the account earning 3% interest contained $1,000 more than the account earning 4%. x=y+1,000. Check extreme cases: if y=0 and x=1,000, then the amount invested at 4% ($0) would still have $0 after 6 years, thus the amount invested at 3% ($1,000) would naturally have more money. But if y=1,000,000 and x=1,001,000, then even after one year the amount invested at 4% would have more money than the amount invested at 3% (1,000,000+40,000=1,040,000 and 1,001,000+30,000+30=1,031,030). Not sufficient.
(2) Last year, the account earning 3% earned exactly $150 in interest. Since accounts earn simple interest, then each account earns the same amount each year --> x*0.03=$150 --> we can find x but still not sufficient.
(1)+(2) Since from (2) we know the value of x, then from x=y+1,000 we can find the value of y, hence we can answer the question. Sufficient.
Answer: C.
Hope it's clear.
07 Nov 2012, 12:05
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Bunuel, your explanations were indeed helpful.
Meanwhile from "(2) Last year, the account earning 3% earned exactly $150 in interest."
Shouldn't it be x(0.03)*5 = $150?
The accounts were opened 6 yrs ago, and last yr would mean the account would have been
active for 5yrs...Other than that the explanations are crystal clear.
Thanks.
Meanwhile from "(2) Last year, the account earning 3% earned exactly $150 in interest."
Shouldn't it be x(0.03)*5 = $150?
The accounts were opened 6 yrs ago, and last yr would mean the account would have been
active for 5yrs...Other than that the explanations are crystal clear.
Thanks.
