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.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

Loan X has a principal of $10,000x and a yearly simple inter [#permalink]

Show Tags

07 Aug 2013, 12:36

4

This post received KUDOS

14

This post was BOOKMARKED

Loan X has a principal of $10,000x and a yearly simple interest rate of 4%. Loan Y has a principal of $10,000y and a yearly simple interest rate of 8%. Loans X and Y will be consolidated to form Loan Z with a principal of $(10,000x + 10,000y) and a yearly simple interest rate of r%, where r = (4x+8y)/(x+y). In the table, select a value for x and a value for y corresponding to a yearly simple interest rate of 5% for the consolidated loan. Make only two selections, one in each column.

Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink]

Show Tags

07 Aug 2013, 14:49

27

This post received KUDOS

15

This post was BOOKMARKED

You have X amount of 4% interest rate and Y amount of 8%. After consolidating these two deposits, the formula to find the new interest rate(r%) of the consolidated amounts is:

r= (4x+8y)/(x+y)

the problem indicates the new interest rate(r%) of the mix is 5% substituting r with 5,we get:

5=(4x+8y)/(x+y)

5x+5y=4x+8y

x=3y

After you get the above equation, you just need to look at your options for an x that is 3 times of y. Y=32 X=96

Loan X has a principal of $10,000x and a yearly simple interest rate of 4%. Loan Y has a principal of $10,000y and a yearly simple interest rate of 8%. Loans X and Y will be consolidated to form Loan Z with a principal of $(10,000x + 10,000y) and a yearly simple interest rate of r%, where r = (4x+8y)/(x+y). In the table, select a value for x and a value for y corresponding to a yearly simple interest rate of 5% for the consolidated loan. Make only two selections, one in each column.

This Integrated Reasoning Two-Part Analysis question can be broken down into a standard weighted-average question. Forgetting the 10,000 constant (which is only there to confuse you), you need to find the weighted average of x (4%) and y (8%) that comes up to 5%. The algebraic solution above is good, but you can also solve this through logic if you preferred. X brings down the average by 1, Y brings up the average by 3. Obviously there need to be more x's than y's, because the weighted average is closer to x. Hence we need 3 x's for every 1 y to end up at the weighted average given.

From there, you have to find answer choices that have a 3 to 1 ratio. Since there could be an infinite number of solutions, you know the GMAT will only give you one option among the answer choices that works. In this case 32 and 96. Again you need more x's than y's, so x is 96 and y is 32.

Quick takeaway here is that most of the concepts that you study for the GMAT are applied on the IR section as well. There isn't much new content to study (basically just graphics analysis), but sometimes you need to apply familiar concepts in new ways.

Re: Loan X has a principal of $10,000x and a yearly simple inter [#permalink]

Show Tags

18 Dec 2015, 02:37

ozhan wrote:

You have X amount of 4% interest rate and Y amount of 8%. After consolidating these two deposits, the formula to find the new interest rate(r%) of the consolidated amounts is:

r= (4x+8y)/(x+y)

the problem indicates the new interest rate(r%) of the mix is 5% substituting r with 5,we get:

5=(4x+8y)/(x+y)

5x+5y=4x+8y

x=3y

After you get the above equation, you just need to look at your options for an x that is 3 times of y. Y=32 X=96

Hope my first post helps.

NOW THAT NAILED IT. BY MERELY LOOKING AT THE QUESTION, WITHOUT SOLVING, YOU MIGHT NOTICE SOMETHING WITH 32 AND 98 AND 4 AND 8. BUT THEN YOU HAD TO SOLVE TO FIND OUT WHICH IS FOR WHICH SIDE.

When deciding on how to represent an interest rate, you have to pay careful attention to what the prompt tells you.

If you were trying to calculate a basic interest, then you would almost certainly use a decimal point.

For example, 10% on a $200 load is (.10)($200) = $20

In this question though, we're told that a loan has an interest rate of R%. Notice how the % sign is already there - that means we should NOT use a decimal point. When we're told that R = (4x+8y)/(x+y), we're performing the specific calculation that's described in the prompt, so we need to use R=5 (and not R=.05).

I want to know the solution for the following question:-

"Loan X has a principal of $10000X and a yearly simple interest rate of 4%. Loan Y has a principle of $10000Y and a yearly simple interest of 8%. Loans X and Y will be consolidated to form Loan Z with a principle of $(10000X + 10000Y) and a yearly SI of r%, where r=(4X+8Y)/(X+Y). what will be the value of X and Y corresponding to a yearly SI of 5% for the consolidated loan."

Thanks in advance!

Last edited by abhimahna on 02 Jul 2017, 09:52, edited 1 time in total.