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11 Apr 2012, 01:38
5
31
00:00

Difficulty:

15% (low)

Question Stats:

81% (02:01) correct 19% (02:01) wrong based on 497 sessions

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Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price? A.$4,063
B. $5,325 C.$5,351
D. $6,000 E.$6,154
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Re: Last year a certain bond with a face value of $5,000 yielded 8 percent [#permalink] ### Show Tags 11 Nov 2013, 10:19 16 6 sapna44 wrote: Last year a certain bond price with a face value of 5000 yielded 8% of its face value in interest. If that interest was approx 6.5 of the bond's selling price approx what was the bond's selling price? A. 4063 B. 5325 C. 5351 D. 6000 E. 6154 ronr34 wrote: Hi Mike, I found this question and I tried to approximate.... What I did was approximate the selling price as 6 instead of 6.5 and got something along the lines of 6666. Luckily I chose the answer that was closes to it, but if I had approximated to 7 instead, I may have gotten stuck between answers D and E.... Can you help with this? Dear ronr34, I'm happy to help. Remember, one criterion for approximation is that the answer choices be far apart and well-spaced. Here, the answers are not particularly far apart, so we are much more restricted in the kinds of approximating we can do. Here's how I would think about it. First of all, 8% of$5000 is $400. For this part, it should be easy to calculate the exact value. Now, 6.5% of the selling price is$400.
Let x = selling price
0.065*x = 400
To be honest, the answers are close enough together that I don't want to approximate 6.5 to either 6 or 7. Here's what I am going to do. First, I will multiply both sides by 100.
6.5*x = 40,000
Now, here is think is the big key to solving this problem easily --- change the decimal 6.5 to the fraction 13/2. In 90% of all cases, fractions are MUCH MUCH EASIER for calculation than are decimals!!
(13/2)*x = 40,000
13*x = 80,000

x = 80,000/13

Well, 13*6 = 78, so 13 goes into 80 six times, with a remainder of 2. That means, x is more than 6000. That's enough to isolate (E).

A totally different strategy --- backsolving. Once we know 6.5% of x is $400, plug in answer choices to see where we are. Normally, I would recommend starting with (C) --- see: http://magoosh.com/gmat/2012/gmat-plugg ... -choice-c/ Here, though, many of the answers are warthog-ugly numbers, but the question is handing us answer (D) on a golden platter as an ideal candidate for backsolving. (Incidentally, that's a very handy trick to have up your sleeve --- four ugly number answer choices, and one nice round number: chances are extremely good that backsolving with that one nice round number will help you find the answer quickly.) What's 6.5% of$6000?

Well, 1% of $6000 is$60.
Six times that means: 6% of $6000 is$360.
Now, divide the 1% line in half --- 0.5% of $6000 is$30.
Now, add the last two lines --- 6.5% of $6000 is$390.

### Show Tags

11 Apr 2012, 02:01
3
3
sapna44 wrote:
Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price? A.$4,063
B. $5,325 C.$5,351
D. $6,000 E.$6,154

Interest = 0.08*5000 = 0.065*selling price --> selling price = 0.08*5000/0.065 --> selling price = ~6,154

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Joined: 26 Feb 2013
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### Show Tags

11 Nov 2013, 12:20
mikemcgarry wrote:
sapna44 wrote:
Last year a certain bond price with a face value of 5000 yielded 8% of its face value in interest. If that interest was approx 6.5 of the bond's selling price approx what was the bond's selling price?
A. 4063
B. 5325
C. 5351
D. 6000
E. 6154

ronr34 wrote:
Hi Mike,
I found this question and I tried to approximate....
What I did was approximate the selling price as 6 instead of 6.5 and got something along the lines of 6666.
Luckily I chose the answer that was closes to it, but if I had approximated to 7 instead, I may have gotten stuck
between answers D and E.... Can you help with this?

Dear ronr34,
I'm happy to help.

Remember, one criterion for approximation is that the answer choices be far apart and well-spaced. Here, the answers are not particularly far apart, so we are much more restricted in the kinds of approximating we can do. Here's how I would think about it.

First of all, 8% of $5000 is$400. For this part, it should be easy to calculate the exact value.

Now, 6.5% of the selling price is $400. Let x = selling price 0.065*x = 400 To be honest, the answers are close enough together that I don't want to approximate 6.5 to either 6 or 7. Here's what I am going to do. First, I will multiply both sides by 100. 6.5*x = 40,000 Now, here is think is the big key to solving this problem easily --- change the decimal 6.5 to the fraction 13/2. In 90% of all cases, fractions are MUCH MUCH EASIER for calculation than are decimals!! (13/2)*x = 40,000 13*x = 80,000 x = 80,000/13 Well, 13*6 = 78, so 13 goes into 80 six times, with a remainder of 2. That means, x is more than 6000. That's enough to isolate (E). A totally different strategy --- backsolving. Once we know 6.5% of x is$400, plug in answer choices to see where we are. Normally, I would recommend starting with (C) --- see:
http://magoosh.com/gmat/2012/gmat-plugg ... -choice-c/
Here, though, many of the answers are warthog-ugly numbers, but the question is handing us answer (D) on a golden platter as an ideal candidate for backsolving. (Incidentally, that's a very handy trick to have up your sleeve --- four ugly number answer choices, and one nice round number: chances are extremely good that backsolving with that one nice round number will help you find the answer quickly.)

What's 6.5% of $6000? Well, 1% of$6000 is $60. Six times that means: 6% of$6000 is $360. Now, divide the 1% line in half --- 0.5% of$6000 is $30. Now, add the last two lines --- 6.5% of$6000 is $390. Thus, if x = 6000, then 6.5% of it is not big enough. We need something bigger than$6000, and the only choice is (E).

Does all this make sense?
Mike

Does all this make sense?
Mike

Thanks Mike!!!!
Great answer, I hope I still have enough time to try and work
it into my toolbox....
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Posts: 449
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Concentration: Finance, Entrepreneurship
Schools: WHU MBA"20 (A$) GMAT 1: 580 Q46 V24 GPA: 3.88 WE: Information Technology (Consulting) Re: Last year a certain bond with a face value of$5,000 yielded 8 percent  [#permalink]

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29 Dec 2015, 11:56
2
sapna44 wrote:
Last year a certain bond price with a face value of 5000 yielded 8% of its face value in interest. If that interest was approx 6.5 of the bond's selling price approx what was the bond's selling price?

A. 4063
B. 5325
C. 5351
D. 6000
E. 6154

8% from 5000=400 ->$$400=\frac{6,5}{100}*S$$ (Selling price) = $$\frac{400*20}{1.3}$$, here we can estimate... $$\frac{40}{13}$$~3, so $$400/1.3$$ ~ 3000 (actually more) 3000*2=6000 we need an answer choice which is slightly more than 6000, hence Answer E
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GMAT 6: 690 Q47 V37

### Show Tags

06 Mar 2016, 10:49
1
bhamini1 wrote:
I have a query.It says approx 6.5 of the bond's selling price ,but above 6.5% has been considered.Why is that?can anybody explain.

Dear bhamini1,
I'm happy to respond. My friend, the person who posted the question made a mistake. Whoever posted the question omitted the word "percent" after the 6.5. About 90% of the questions posted on GMAT Club are posted by students, and students don't always do a perfect job of posting a question.

My friend, one of the most important skills to have, on the GMAT and in the business world, is critical thinking. See this blog article:
Doing GMAT Critical Reasoning
You cannot simply believe everything is mistake-free and meant to be trusted as is. If you interpret everything literally as if the world is a perfect place, then unscrupulous people in the business world will cheat you out of everything. You have to be cunningly clever to succeed on the GMAT and in the business world.

My friend, I want to support your success in every way I can. Does all this make sense?
Mike
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Mike McGarry
Magoosh Test Prep

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Re: Last year a certain bond with a face value of $5,000 yielded 8 percent [#permalink] ### Show Tags 05 Dec 2017, 18:41 2 sapna44 wrote: Last year a certain bond price with a face value of 5000 yielded 8% of its face value in interest. If that interest was approx 6.5 of the bond's selling price approx what was the bond's selling price? A. 4063 B. 5325 C. 5351 D. 6000 E. 6154 We are given that a certain bond with a face value of$5,000 yielded 8% of its face value in interest. Thus, we can determine the interest as follows:

5,000 x 0.08 = 400

We also know that the $400 of interest was approximately 6.5% of the bond's selling price. Thus, we can create the following equation, where p = the bond’s selling price: 400 = 0.065 x p 400/0.065 = p 400,000/65 = p 6,154 ≈ p Answer: E _________________ # Scott Woodbury-Stewart Founder and CEO Scott@TargetTestPrep.com 202 Reviews 5-star rated online GMAT quant self study course See why Target Test Prep is the top rated GMAT quant course on GMAT Club. Read Our Reviews If you find one of my posts helpful, please take a moment to click on the "Kudos" button. Director Joined: 04 Dec 2015 Posts: 725 Location: India Concentration: Technology, Strategy WE: Information Technology (Consulting) Re: Last year a certain bond with a face value of$5,000 yielded 8 percent  [#permalink]

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15 Dec 2018, 08:53
sapna44 wrote:
Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price? A.$4,063
B. $5,325 C.$5,351
D. $6,000 E.$6,154

Interest $$= \frac{8*5000}{100} = 400$$

Given Interest is $$6.5$$ percent of the bond's selling price.

$$400 =\frac{6.5}{100} * SP$$

$$SP = \frac{400 * 100}{6.5} =\sim 6,154$$

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Re: Last year a certain bond with a face value of $5,000 yielded 8 percent [#permalink] ### Show Tags 25 Mar 2019, 05:46 1 Top Contributor sapna44 wrote: Last year a certain bond with a face value of$5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price?

A. $4,063 B.$5,325
C. $5,351 D.$6,000
E. $6,154 Last year a certain bond with a face value of$5,000 yielded 8 percent of its face value in interest
8% of $5,000 =$400
So, interest = $400 If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price? Let x = the bond's selling price So,$400 = 6.5% of x
In other words: $400 = 0.065x Solve: x = 400/0.065 ≈ 6154 Answer: E Cheers, Brent _________________ Test confidently with gmatprepnow.com GMAT Club Legend Joined: 18 Aug 2017 Posts: 6305 Location: India Concentration: Sustainability, Marketing GPA: 4 WE: Marketing (Energy and Utilities) Re: Last year a certain bond with a face value of$5,000 yielded 8 percent  [#permalink]

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25 Mar 2019, 07:53
sapna44 wrote:
Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price? A.$4,063
B. $5,325 C.$5,351
D. $6,000 E.$6,154

5000*8/100= 6.5/100 * SP
SP= 6154
IMO E
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Re: Last year a certain bond with a face value of $5,000 yielded 8 percent [#permalink] ### Show Tags 25 Mar 2019, 08:30 sapna44 wrote: Last year a certain bond with a face value of$5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price?

A. $4,063 B.$5,325
C. $5,351 D.$6,000