GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 17 Nov 2018, 17:47

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 in November
PrevNext
SuMoTuWeThFrSa
28293031123
45678910
11121314151617
18192021222324
2526272829301
Open Detailed Calendar
  • FREE Quant Workshop by e-GMAT!

     November 18, 2018

     November 18, 2018

     07:00 AM PST

     09:00 AM PST

    Get personalized insights on how to achieve your Target Quant Score. November 18th, 7 AM PST
  • How to QUICKLY Solve GMAT Questions - GMAT Club Chat

     November 20, 2018

     November 20, 2018

     09:00 AM PST

     10:00 AM PST

    The reward for signing up with the registration form and attending the chat is: 6 free examPAL quizzes to practice your new skills after the chat.

James invested $5000 in scheme A for 1 year at a simple annual interes

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

Hide Tags

e-GMAT Representative
User avatar
P
Joined: 04 Jan 2015
Posts: 2203
James invested $5000 in scheme A for 1 year at a simple annual interes  [#permalink]

Show Tags

New post 27 Aug 2018, 02:43
00:00
A
B
C
D
E

Difficulty:

  45% (medium)

Question Stats:

68% (01:29) correct 32% (02:00) wrong based on 90 sessions

HideShow timer Statistics

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

Image

_________________








Register for free sessions
Number Properties | Algebra |Quant Workshop

Success Stories
Guillermo's Success Story | Carrie's Success Story

Ace GMAT quant
Articles and Question to reach Q51 | Question of the week

Must Read Articles
Number Properties – Even Odd | LCM GCD | Statistics-1 | Statistics-2
Word Problems – Percentage 1 | Percentage 2 | Time and Work 1 | Time and Work 2 | Time, Speed and Distance 1 | Time, Speed and Distance 2
Advanced Topics- Permutation and Combination 1 | Permutation and Combination 2 | Permutation and Combination 3 | Probability
Geometry- Triangles 1 | Triangles 2 | Triangles 3 | Common Mistakes in Geometry
Algebra- Wavy line | Inequalities

Practice Questions
Number Properties 1 | Number Properties 2 | Algebra 1 | Geometry | Prime Numbers | Absolute value equations | Sets



| '4 out of Top 5' Instructors on gmatclub | 70 point improvement guarantee | www.e-gmat.com

Manager
Manager
User avatar
S
Status: Studying Quant
Joined: 04 Sep 2017
Posts: 107
GPA: 3.6
WE: Sales (Computer Software)
Re: James invested $5000 in scheme A for 1 year at a simple annual interes  [#permalink]

Show Tags

New post 27 Aug 2018, 04:11
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

Image


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
User avatar
P
Status: QA & VA Forum Moderator
Joined: 11 Jun 2011
Posts: 4220
Location: India
GPA: 3.5
WE: Business Development (Commercial Banking)
GMAT ToolKit User Premium Member
Re: James invested $5000 in scheme A for 1 year at a simple annual interes  [#permalink]

Show Tags

New post 27 Aug 2018, 06:11
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 )

CEO
CEO
User avatar
D
Joined: 11 Sep 2015
Posts: 3122
Location: Canada
Re: James invested $5000 in scheme A for 1 year at a simple annual interes  [#permalink]

Show Tags

New post 09 Oct 2018, 04:59
Top Contributor
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


Scheme A
Interest = 5% of $5,000 = $250

Scheme B
10% interest compounded semi-annually means that the interest is compounded 2 times (in 1 year) at a rate of 5% each time
One option is to apply the compound interest formula, but since we're only compounding the interest twice, it may be faster to just perform those 2 calculations.

After 6 months, the interest = 5% of $10,000 = $500
So, the value of the investment = $10,000 + $500 = $10,500

After 12 months, the interest = 5% of $10,500 = $525
So, the value of the investment = $10,500 + $525= $11,025

So, the accumulated interest = $11,025 - $10,000 = $1,025

What is the positive difference between the interest earned by James from scheme A and scheme B?
Difference = $1,025 - $250 = $775

Answer: B

Cheers,
Brent
_________________

Test confidently with gmatprepnow.com
Image

Target Test Prep Representative
User avatar
P
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 4170
Location: United States (CA)
Re: James invested $5000 in scheme A for 1 year at a simple annual interes  [#permalink]

Show Tags

New post 12 Oct 2018, 06:58
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


For scheme A, the amount of interest earned is 5000 x 0.05 = 250 dollars.

For scheme B, since the interest is compounded twice a year, the annual interest rate of 10% is halved for each 6-month compounding period.

10,000 x 0.05 = 500 dollars are earned in the first 6 months. Thus, the principal is now 10,500.

10,500 x 0.05 = 525 dollars are earned in the last 6 months.

So a total amount of interest earned is 1,025 dollars.

So the difference is 1,025 - 250 = 775 dollars.

Answer: B
_________________

Scott Woodbury-Stewart
Founder and CEO

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

GMAT Club Bot
Re: James invested $5000 in scheme A for 1 year at a simple annual interes &nbs [#permalink] 12 Oct 2018, 06:58
Display posts from previous: Sort by

James invested $5000 in scheme A for 1 year at a simple annual interes

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


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| 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®.