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27 Aug 2018, 03:43
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Difficulty:

35% (medium)

Question Stats:

74% (01:38) correct 26% (02:20) wrong based on 43 sessions

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James invested $5000 in scheme A for 1 year at a simple annual interest rate of 5% and invested another$10000 in scheme B for one year at an annual interest rate of 10% compounded semi-annually. What is the positive difference between the interest earned by James from scheme A and scheme B?

A. 250
B. 775
C. 1025
D. 1750
E. 2000

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Re: James invested $5000 in scheme A for 1 year at a simple annual interes [#permalink] Show Tags 27 Aug 2018, 05:11 1 EgmatQuantExpert wrote: James invested$5000 in scheme A for 1 year at a simple annual interest rate of 5% and invested another $10000 in scheme B for one year at an annual interest rate of 10% compounded semi-annually. What is the positive difference between the interest earned by James from scheme A and scheme B? A. 250 B. 775 C. 1025 D. 1750 E. 2000 To read all our articles: Must read articles to reach Q51 Scheme A:$5,000 at 5% simple annual interest

5,000 * .05 * 1 = 5250 ----> $250 of interest Scheme B:$10,000 at 10% compounded semi annually

10,000(1 + $$\frac{.1}{2}$$)$$^2$$ --------> 10,000(1.05)$$^2$$ --------> 10,000(1.1025) = 11,025

$11,025 ----------->$1,025 of interest

Positive difference between the interest earned by Scheme A vs Scheme B

$1,025 -$250 = $775 Answer: B _________________ Would I rather be feared or loved? Easy. Both. I want people to be afraid of how much they love me. How to sort questions by Topic, Difficulty, and Source: https://gmatclub.com/forum/search.php?view=search_tags Board of Directors Status: QA & VA Forum Moderator Joined: 11 Jun 2011 Posts: 4011 Location: India GPA: 3.5 WE: Business Development (Commercial Banking) Re: James invested$5000 in scheme A for 1 year at a simple annual interes  [#permalink]

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27 Aug 2018, 07:11
EgmatQuantExpert wrote:
James invested $5000 in scheme A for 1 year at a simple annual interest rate of 5% and invested another$10000 in scheme B for one year at an annual interest rate of 10% compounded semi-annually. What is the positive difference between the interest earned by James from scheme A and scheme B?

A. 250
B. 775
C. 1025
D. 1750
E. 2000

$$Amount_{Si} = 5000 + \frac{5000*5*1}{100}$$

So, $$Amount_{Si} = 5250$$

$$Amount_{Ci} = 5000( 1 + \frac{10}{200})^{2}$$

So, $$Amount_{Ci} = 11025.00$$

So, the required difference is $1,025 -$250 = $775 , Answer must be (B) _________________ Thanks and Regards Abhishek.... PLEASE FOLLOW THE RULES FOR POSTING IN QA AND VA FORUM AND USE SEARCH FUNCTION BEFORE POSTING NEW QUESTIONS How to use Search Function in GMAT Club | Rules for Posting in QA forum | Writing Mathematical Formulas |Rules for Posting in VA forum | Request Expert's Reply ( VA Forum Only ) Re: James invested$5000 in scheme A for 1 year at a simple annual interes &nbs [#permalink] 27 Aug 2018, 07:11
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James invested \$5000 in scheme A for 1 year at a simple annual interes

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