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# If \$4500 dollars was invested in a bond fund when the price

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If \$4500 dollars was invested in a bond fund when the price [#permalink]

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23 Jul 2007, 18:40
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

If \$4500 dollars was invested in a bond fund when the price per share was \$9 and \$3000 was invested when the price was \$10, What is the average price per share?

a) 9.40
b) 9.375
c) 9.50
d) 9.75
e) 10.0

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Senior Manager
Joined: 28 Jun 2007
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23 Jul 2007, 18:42
(4500 + 3000)/(500 + 300) = 75/8

9.375

500 is the number of shares bought when its \$9
300 is the number of shares bought when its \$10

total cost/total shares = avg. cost per share

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GMAT Club Legend
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23 Jul 2007, 18:44
# of shares issued with 4500 invested at pps of 9 = 4500/9 = 500
# of shares issued with 3000 invested at pps of 10 = 3000/10 = 300

TOtal number of shares = 800
Total amount invested = 7500

Average PPS = 7500/800 = 75/8 = 9.375

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Manager
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23 Jul 2007, 18:49

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Senior Manager
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23 Jul 2007, 20:11
B. \$9.375

Total price of all shares bought (\$7500)

Divided by number of shares purchased at each price ( 500+ 300 = 800)

\$7500/800 = \$9.375

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Intern
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24 Jul 2007, 08:30
tinman1412 wrote:
If \$4500 dollars was invested in a bond fund when the price per share was \$9 and \$3000 was invested when the price was \$10, What is the average price per share?

a) 9.40
b) 9.375
c) 9.50
d) 9.75
e) 10.0

I would add that with a simple glance you can get rid of 3 of the answers immediately.

Note that if the same number of shares were purchased at each price point, the average would be \$9.5/share. Since more shares were purchased at \$9 than \$10 (\$4500 vs \$3000 ~ 500 to 300), we know the average is closer to 9 than 10. Therefore we can cross out c, d, and e. This is a good way to check your answer if you are prone (like me) to dumb errors.

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Re: Avg Price?   [#permalink] 24 Jul 2007, 08:30
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# If \$4500 dollars was invested in a bond fund when the price

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