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06 Jul 2013, 09:15
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50% (03:14) correct 50% (02:50) wrong based on 113 sessions

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Jim earns $I this year and will not earn anything next year. If he deposits some of his income at First Ranch Savings Bank, he will earn an interest of b per year per dollar deposited. What fraction of his income should Jim deposit, in terms of b, to ensure he spends the same amount next year as he spends this year? (Assume that Jim spends all money that he does not deposit) (A)1/ b+1 (B)1/2b+1 (C)1/3b+2 (D)1/b+2 (E)1/2b+3 [Reveal] Spoiler: OA Math Expert Joined: 02 Sep 2009 Posts: 38908 Followers: 7740 Kudos [?]: 106262 [0], given: 11618 Re: Jim earns$I this year and will not earn anything next year [#permalink]

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06 Jul 2013, 09:22
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guerrero25 wrote:
Jim earns $I this year and will not earn anything next year. If he deposits some of his income at First Ranch Savings Bank, he will earn an interest of b per year per dollar deposited. What fraction of his income should Jim deposit, in terms of b, to ensure he spends the same amount next year as he spends this year? (Assume that Jim spends all money that he does not deposit) (A)1/ b+1 (B)1/2b+1 (C)1/3b+2 (D)1/b+2 (E)1/2b+3 "Stolen" OG question: Quote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year? A. $$\frac{1}{(r+2)}$$ B. $$\frac{1}{2r+2}$$ C. $$\frac{1}{3r+2}$$ D. $$\frac{1}{r+3}$$ E. $$\frac{1}{2r+3}$$ Discussed here: this-year-henry-will-save-a-certain-amount-of-his-income-100891.html _________________ Manager Joined: 23 May 2013 Posts: 191 Location: United States Concentration: Technology, Healthcare GMAT 1: 760 Q49 V45 GPA: 3.5 Followers: 3 Kudos [?]: 87 [1] , given: 42 Re: Jim earns$I this year and will not earn anything next year [#permalink]

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25 Feb 2014, 07:55
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For those who want an answer to this question specifically:

This year, Jim ears $1 and deposits x of that into his account, leaving him with (1-x) to spend. Next year, Jim earns an interest of x*b, leaving him with a total of x + x*b in his bank account, also to spend. Thus, we want to find x such that: $$(1 - x) = x + xb$$ $$1 = 2x + xb$$ $$1 = x(b+2)$$ $$x = 1/(b+2)$$ Answer: D The key is not to get confused about the interest; don't make the mistake of thinking that he only has x*b to spend, remember that interest is added on to the principle. GMAT Club Legend Joined: 09 Sep 2013 Posts: 15474 Followers: 649 Kudos [?]: 209 [0], given: 0 Re: Jim earns$I this year and will not earn anything next year [#permalink]

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25 Sep 2015, 08:57
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Re: Jim earns $I this year and will not earn anything next year [#permalink] ### Show Tags 01 Jan 2017, 14:42 Hello from the GMAT Club BumpBot! Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos). Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________ Re: Jim earns$I this year and will not earn anything next year   [#permalink] 01 Jan 2017, 14:42
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# Jim earns \$I this year and will not earn anything next year

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