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16 Jun 2021, 08:45
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
45% (03:07) correct
55%
(03:36)
wrong
based on 85
sessions
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Some amount was divided into two equal parts. The first part was invested at 10% per annum at simple interest for 4 years. The second part was invested at 10% per annum at compound interest for 3 years. If the difference in the interests earned from the two investments is Rs. 1000, find the approximate value of the total initial amount.
(A) Rs. 28,485
(B) Rs. 28,985
(C) Rs. 29,485
(D) Rs. 29,985
(E) Rs. 30,485
(A) Rs. 28,485
(B) Rs. 28,985
(C) Rs. 29,485
(D) Rs. 29,985
(E) Rs. 30,485
16 Jun 2021, 08:55
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An investment earning 10% simple interest for 4 years earns 40%. An investment earning 10% per year, compounded annually (and the question really needs to say "compounded annually", since it would be perfectly reasonable to assume continuous compounding here, for example) then the investment is multiplied in value by 1.1 each year, so after 3 years, is multiplied in value by 1.1^3 = 1.331. So it earned 33.1%. The invested amounts were equal, so if each was $A, we know:
0.4A - 0.331A = 1000
0.069A = 1000
A = 1000/0.069
A = 1,000,000/69
and since we want to find 2A, the answer is 2,000,000/69. With these numbers, I don't see any particularly clean way to pick an answer choice here without doing long division, which is not the kind of thing the GMAT ever requires, but a calculator tells me the answer is 28,985. Estimation is really risky here, with answers this close together - even just rounding the '69' off to '70' would lead you to pick A, which is not the right answer.
Posted from my mobile device
0.4A - 0.331A = 1000
0.069A = 1000
A = 1000/0.069
A = 1,000,000/69
and since we want to find 2A, the answer is 2,000,000/69. With these numbers, I don't see any particularly clean way to pick an answer choice here without doing long division, which is not the kind of thing the GMAT ever requires, but a calculator tells me the answer is 28,985. Estimation is really risky here, with answers this close together - even just rounding the '69' off to '70' would lead you to pick A, which is not the right answer.
Posted from my mobile device
03 Oct 2024, 15:11
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A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.
This post was generated automatically.
