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Kevin invested $8500 for one year at a simple annual interest rate of

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Kevin invested $8500 for one year at a simple annual interest rate of [#permalink]

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Question Stats:

67% (01:22) correct 33% (02:30) wrong based on 12 sessions

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Kevin invested $8500 for one year at a simple annual interest rate of 5 percent and invested $ 12000 for one year at an annual interest rate of 8.5 percent compounded semiannually. What is the total amount of interest that Kevin eared on the two investments?

A. $1,020
B. $1,088
C. $1,353.95
D. $1,445.95
E. $1,467.95
[Reveal] Spoiler: OA

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Last edited by HolaMaven on 20 Aug 2017, 22:29, edited 1 time in total.

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Re: Kevin invested $8500 for one year at a simple annual interest rate of [#permalink]

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New post 20 Aug 2017, 12:52
You can avoid calculation of compounded interest here.

$8,500 for one year at a simple annual interest rate of 5 percent = 10% *8500= 850 so 5% = \(\frac{850}{2}\) = 425

Now $12,000 were invested for one year at a simple annual interest rate of 8.5 percent, then it would earn 8%*12000+0.5%*12000 = 960+60=$1020
This total is coming as 425+1020 = 1445.
Thus answer has to be greater than 1445. Only Option E
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Re: Kevin invested $8500 for one year at a simple annual interest rate of [#permalink]

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New post 20 Aug 2017, 13:31
Hi HolaMaven,

This question has already been discussed here:
https://gmatclub.com/forum/kevin-invest ... fl=similar

Please read and follow the rules for posting questions!
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Re: Kevin invested $8500 for one year at a simple annual interest rate of   [#permalink] 20 Aug 2017, 13:31
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