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01 Mar 2026, 06:26
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
75%
(hard)
Question Stats:
49% (02:43) correct
51%
(02:19)
wrong
based on 47
sessions
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Not Attempted Yet
Exactly three years ago, Alice invested a total amount of money, with half invested in a corporate bond that paid 8 percent interest compounded annually and the other half invested in a government bond that paid 8 percent simple interest. Did Alice invest more than $2,000 in total?
(1) Exactly one year ago, the balance of the amount invested in the corporate bond was more than $6 greater than the balance of the amount invested in the government bond.
(2) Today, the balance of the amount invested in the corporate bond is more than $6 greater than the balance of the amount invested in the government bond.
(1) Exactly one year ago, the balance of the amount invested in the corporate bond was more than $6 greater than the balance of the amount invested in the government bond.
(2) Today, the balance of the amount invested in the corporate bond is more than $6 greater than the balance of the amount invested in the government bond.
02 Mar 2026, 07:04
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Let invested amount is 100x
Amount invested in corporate bond = 50x
Amount invested in government bond = 50x
Statement 1:
Exactly one year ago, means, 2 years from investment start.
Government bond amount after 2 years = 50x + (50x * 8 * 2)/100 = 58x
Corporate bond amount after 2 years = 50x * (1+.08)^2 = 58.32x
Corporate bond - Government bond = 0.32x > $ 6
x > 6/0.32 > 18.32
100x > 1832. So 100x can be 1832 and 2001 both possibility.
Is invested amount, 100x > 2000, Yes and No both. So Insufficient.
Statement 2:
Today, means, 3 years from investment start.
Government bond amount after 3 years = 50x + (50x * 8 * 3)/100 = 62x
Corporate bond amount after 3 years = 50x * (1+.08)^3 = 62.98x
Corporate bond - Government bond = 0.98x > $ 6
x > 6/0.98 > 6.122
100x > 612.2. So 100x can be 613 and 2001 both.
Is invested amount > 2000, Yes and No both. So Insufficient.
Statement 1 & 2 combined will also give the same condition. Which is the invested value can be less than or greater than 2000. Hence insufficient.
Answer - E
Amount invested in corporate bond = 50x
Amount invested in government bond = 50x
Statement 1:
Exactly one year ago, means, 2 years from investment start.
Government bond amount after 2 years = 50x + (50x * 8 * 2)/100 = 58x
Corporate bond amount after 2 years = 50x * (1+.08)^2 = 58.32x
Corporate bond - Government bond = 0.32x > $ 6
x > 6/0.32 > 18.32
100x > 1832. So 100x can be 1832 and 2001 both possibility.
Is invested amount, 100x > 2000, Yes and No both. So Insufficient.
Statement 2:
Today, means, 3 years from investment start.
Government bond amount after 3 years = 50x + (50x * 8 * 3)/100 = 62x
Corporate bond amount after 3 years = 50x * (1+.08)^3 = 62.98x
Corporate bond - Government bond = 0.98x > $ 6
x > 6/0.98 > 6.122
100x > 612.2. So 100x can be 613 and 2001 both.
Is invested amount > 2000, Yes and No both. So Insufficient.
Statement 1 & 2 combined will also give the same condition. Which is the invested value can be less than or greater than 2000. Hence insufficient.
Answer - E
02 Mar 2026, 08:13
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Some observations :
If a sum of money x is invested at 8% simple interest , two years later the balance is 1.16x.
If the same sum is invested at 8% interest compounded annually , two years later the balance is 1.1664x .
Suppose x dollars were invested in each of the two funds . We want to know whether x is greater than 1000.
From (1) , we get that 0.0064x > 6
Thus 6.4x > 6000 and x may be greater than, equal to , or smaller than 1000
(2) is weaker than statement (1) , because all we can say is that after two years, the difference in the balances is greater than 6 dollars . It places less of a constraint on x than does number (1) .Thus it is not sufficient, nor is the combination of the two statements sufficient.
I think it’s beneficial with people taking the GMAT to know the following
(1 + p%)^ 2 = 1 + 2p percent +( p^2/100) percent
For example : 1.05^2 = 1.1025 whereas 1.07^2 =1.1449 and 1.01^2 = 1.0201
If a sum of money x is invested at 8% simple interest , two years later the balance is 1.16x.
If the same sum is invested at 8% interest compounded annually , two years later the balance is 1.1664x .
Suppose x dollars were invested in each of the two funds . We want to know whether x is greater than 1000.
From (1) , we get that 0.0064x > 6
Thus 6.4x > 6000 and x may be greater than, equal to , or smaller than 1000
(2) is weaker than statement (1) , because all we can say is that after two years, the difference in the balances is greater than 6 dollars . It places less of a constraint on x than does number (1) .Thus it is not sufficient, nor is the combination of the two statements sufficient.
I think it’s beneficial with people taking the GMAT to know the following
(1 + p%)^ 2 = 1 + 2p percent +( p^2/100) percent
For example : 1.05^2 = 1.1025 whereas 1.07^2 =1.1449 and 1.01^2 = 1.0201
