M08-34

Official Solution:


Jules and Jim both invested a certain amount of money in bond M for one year, which pays for 12% simple interest annually. If no other investment was made, then Jules initial investment in bond M was how many dollars more than Jim's investment in bond M ?

Assume Jules invested \($ x\) and Jim invested \($ y\).

The question asks to find the value of \(x-y\).

(1) In one year Jules earned $24 more than Jim from bond M.

The above implies that \(0.12x-0.12y=24\). When divided by 0.12, we get \(x-y=200\). Sufficient.

(2) If the interest were 20% then in one year Jules would have earned $40 more than Jim from bond M.

This is essentially the same type of information as above: \(0.2x-0.2y=40\). When divided by 0.2, we get \(x-y=200\). Sufficient.

Crucial note: When two amounts are increased (decreased) by the same percentage, their difference also increases (decreases) by that same percentage. For instance, if you increase 100 and 150 by 20% to 120 and 180 respectively, then their difference will also increase by the same 20% from 50 to 60.


Answer: D