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Strategies and techniques for approaching featured GMAT topics

# M17-14

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Math Expert
Joined: 02 Sep 2009
Posts: 51218

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16 Sep 2014, 00:01
00:00

Difficulty:

35% (medium)

Question Stats:

68% (01:26) correct 32% (01:30) wrong based on 117 sessions

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A certain amount was deposited at bank A at a rate of $$x$$ percent compounded annually and half that amount was deposited at bank B at a rate of $$y$$ percent compounded annually. In three years, will the total interest on the deposit in bank A be larger than the total interest on the deposit in bank B?

(1) y = 0.8x

(2) The difference between the amounts initially deposited was $100 _________________ Math Expert Joined: 02 Sep 2009 Posts: 51218 Re M17-14 [#permalink] ### Show Tags 16 Sep 2014, 00:01 Official Solution: Statement (1) by itself is sufficient. It means that $$y \lt x$$. A smaller amount deposited at a smaller rate will grow to a smaller figure than a larger amount deposited at a higher rate. Statement (2) by itself is insufficient. We don't know how the interest paid on the deposits compares with the initial difference of$100.

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Joined: 06 Mar 2014
Posts: 243
Location: India
GMAT Date: 04-30-2015

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18 Sep 2014, 23:24
Hi Bunuel,

I have noticed that especially in DS, whenever I am facing a question with regard to SIMPLE INTEREST, AMOUNT, Compounded annually and so on, i get stumped given the limited time frame during a test so I would be grateful if you could suggest me some questions on similar topic that would enable me to understand its most common types and tricky areas.

Placing the values in a given formula is easy. It is getting the synopsis of the qs in a read that would matter.

Math Expert
Joined: 02 Sep 2009
Posts: 51218

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19 Sep 2014, 00:34
earnit wrote:
Hi Bunuel,

I have noticed that especially in DS, whenever I am facing a question with regard to SIMPLE INTEREST, AMOUNT, Compounded annually and so on, i get stumped given the limited time frame during a test so I would be grateful if you could suggest me some questions on similar topic that would enable me to understand its most common types and tricky areas.

Placing the values in a given formula is easy. It is getting the synopsis of the qs in a read that would matter.

Check Compound Interest Problems in our Special Questions Directory.

Theory on Percent and Interest Problems: math-number-theory-percents-91708.html

All DS Percent and Interest Problems to practice: search.php?search_id=tag&tag_id=33
All PS Percent and Interest Problems to practice: search.php?search_id=tag&tag_id=54

Hope this helps.
_________________
Manager
Joined: 08 Feb 2014
Posts: 204
Location: United States
Concentration: Finance
GMAT 1: 650 Q39 V41
WE: Analyst (Commercial Banking)

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24 Nov 2014, 05:39
Just curious...Obviously stmt 2 alone is insufficient because we know nothing about the rates. But if the question stem had given us the relation between the interest rates (maybe y=3x), would stmt 2 have been sufficient? (in cases where Y is greater than X).

Thanks
Manager
Joined: 24 Jul 2011
Posts: 186
Location: India
GMAT 1: 570 Q50 V19
GMAT 2: 650 Q49 V28
GMAT 3: 690 Q50 V34
WE: Information Technology (Investment Banking)

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21 Oct 2015, 06:15
Hi Bunuel,

I am just curious, what shall be the equation of option A. (I agree we don't need an equation over here, but just for understanding, in case we need it, I am curious to know what is actually the calculation)

P (1 + x/100)^3 + P/2 > P/2* (1 + y/100)^3 - P/2
_________________

Middle of nowhere!

Manager
Joined: 05 Dec 2015
Posts: 111

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09 Jun 2016, 22:28
why can't Y & X be 0% and thus the answer is E? How should I know X/Y > 0%?
Intern
Joined: 20 Jan 2013
Posts: 9
GMAT 1: 660 Q49 V30

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21 Aug 2016, 06:45
x>y only when x and y are greater than 1.

x=0.2 y=0.16 as per statement 1.Therefore,x <y. If the amount is really small this may affect the answer.
Manager
Joined: 05 Dec 2015
Posts: 111

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23 Aug 2016, 22:54
Bunuel wrote:
Official Solution:

Statement (1) by itself is sufficient. It means that $$y \lt x$$. A smaller amount deposited at a smaller rate will grow to a smaller figure than a larger amount deposited at a higher rate.

Statement (2) by itself is insufficient. We don't know how the interest paid on the deposits compares with the initial difference of \$100.

Hi - I'm still not understanding why (1) is sufficient because if X=Y=0 then the answer is 'No - A's interest not > than B', but if A>0 then the answer is 'Yes'

Why can't the interest rate be 0% for both accounts and thus the answer is E?
Intern
Joined: 06 May 2016
Posts: 36

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14 Sep 2016, 05:07
Bunuel
I have similar doubt as mdacosta. Why cant x be 0?
I understand that amount deposited cant be 0 otherwise 2nd amount wouldn't be half of the first but x can very well be 0.
Manager
Joined: 17 Jan 2017
Posts: 61

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29 Apr 2018, 03:15
I'm with mdacosta and geek on this one. Answer should be E) if there is no interest at all.
Intern
Joined: 21 Jun 2018
Posts: 2

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17 Jul 2018, 19:29
I second the point of x=y=0 , in that case answer is E
Re: M17-14 &nbs [#permalink] 17 Jul 2018, 19:29
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# M17-14

Moderators: chetan2u, Bunuel

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