It is currently 16 Dec 2017, 20:30

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Gwen invested $10000 at 5% compounded annually

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Senior Manager
Senior Manager
avatar
P
Joined: 27 May 2014
Posts: 320

Kudos [?]: 195 [0], given: 83

GMAT 1: 730 Q49 V41
GMAT ToolKit User Premium Member
Gwen invested $10000 at 5% compounded annually [#permalink]

Show Tags

New post 20 Nov 2017, 04:30
00:00
A
B
C
D
E

Difficulty:

  25% (medium)

Question Stats:

83% (00:57) correct 17% (01:24) wrong based on 18 sessions

HideShow timer Statistics

Gwen invested $10000 at 5% compounded annually. Cheng invested $5000 at 10% compounded annually. How much greater will the total interest earned on Cheng's investment be in two years?

(a) $0
(b) $25
(c) $50
(d) $100
(e) $200
[Reveal] Spoiler: OA

Kudos [?]: 195 [0], given: 83

Expert Post
SVP
SVP
User avatar
G
Joined: 08 Jul 2010
Posts: 1857

Kudos [?]: 2409 [0], given: 51

Location: India
GMAT: INSIGHT
WE: Education (Education)
Reviews Badge
Re: Gwen invested $10000 at 5% compounded annually [#permalink]

Show Tags

New post 20 Nov 2017, 04:40
saswata4s wrote:
Gwen invested $10000 at 5% compounded annually. Cheng invested $5000 at 10% compounded annually. How much greater will the total interest earned on Cheng's investment be in two years?

(a) $0
(b) $25
(c) $50
(d) $100
(e) $200


First Sum = $10000 at 5% compounded annually

First sum after 2 years = (1.05)*(1.05)*10000 = $11025

Total Interest Earned = 11025 - 10000 = $1025



Second Sum = $10000 at 5% compounded annually

Second sum after 2 years = (1.10)*(1.10)*5000 = $6050

Total Interest Earned = 6050 - 5000 = $1050


Difference = 1050-1025 = $25

Answer: Option B
_________________

Prosper!!!
GMATinsight
Bhoopendra Singh and Dr.Sushma Jha
e-mail: info@GMATinsight.com I Call us : +91-9999687183 / 9891333772
Online One-on-One Skype based classes and Classroom Coaching in South and West Delhi
http://www.GMATinsight.com/testimonials.html

22 ONLINE FREE (FULL LENGTH) GMAT CAT (PRACTICE TESTS) LINK COLLECTION

Kudos [?]: 2409 [0], given: 51

Intern
Intern
avatar
B
Joined: 02 Nov 2017
Posts: 3

Kudos [?]: 0 [0], given: 2

Re: Gwen invested $10000 at 5% compounded annually [#permalink]

Show Tags

New post 20 Nov 2017, 04:48
10,000*5/100=500 Year 1
10,500*5/100=525 Year 2
Total interest= 1025

5000*10/100=500 Year 1
5500*10/100=550 Year 2
Total interest=1050

Hence difference in interest is 25$.


Sent from my iPhone using GMAT Club Forum mobile app

Kudos [?]: 0 [0], given: 2

Expert Post
Target Test Prep Representative
User avatar
S
Status: Head GMAT Instructor
Affiliations: Target Test Prep
Joined: 04 Mar 2011
Posts: 1810

Kudos [?]: 984 [0], given: 5

Re: Gwen invested $10000 at 5% compounded annually [#permalink]

Show Tags

New post 22 Nov 2017, 11:11
saswata4s wrote:
Gwen invested $10000 at 5% compounded annually. Cheng invested $5000 at 10% compounded annually. How much greater will the total interest earned on Cheng's investment be in two years?

(a) $0
(b) $25
(c) $50
(d) $100
(e) $200


Let’s determine the interest earned for Gwen:

Year 1:

10,000 x 0.05 = $500

Year 2:

10,500 x 0.05 = $525

Total interest earned in two years is 500 + 525 = $1,025.

Now for Cheng:

Year 1:

5,000 x 0.10 = $500

Year 2:

5,500 x 0.10 = 550

Total interest earned in two years is 500 + 550 = $1,050,

Thus, Cheng earned 1,050 - 1,025 = 25 dollars more than Gwen.

Answer: B
_________________

Jeffery Miller
Head of GMAT Instruction

GMAT Quant Self-Study Course
500+ lessons 3000+ practice problems 800+ HD solutions

Kudos [?]: 984 [0], given: 5

Re: Gwen invested $10000 at 5% compounded annually   [#permalink] 22 Nov 2017, 11:11
Display posts from previous: Sort by

Gwen invested $10000 at 5% compounded annually

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.