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10 Jul 2017, 02:31
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C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
59% (02:06) correct
41%
(01:47)
wrong
based on 249
sessions
History
Date
Time
Result
Not Attempted Yet
The difference between the simple interest after 2 years and the compound interest for 1 year on the same sum of money is $111. What is the sum of money?
(1) The rate of interest for simple interest is 5 percent per annum.
(2) The rate of interest for compound interest is 3 percent greater than the rate of simple interest per annum
(1) The rate of interest for simple interest is 5 percent per annum.
(2) The rate of interest for compound interest is 3 percent greater than the rate of simple interest per annum
10 Jul 2017, 10:06
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B
The difference between the simple interest after 2 years and the compound interest for 1 year on the same sum of money is $111. What is the sum of money?
(1) The rate of interest for simple interest is 5 percent per annum.
(2) The rate of interest for compound interest is 3 percent greater than the rate of simple interest per annum
The difference between the simple interest after 2 years and the compound interest for 1 year on the same sum of money is $111. What is the sum of money?
(1) The rate of interest for simple interest is 5 percent per annum.
(2) The rate of interest for compound interest is 3 percent greater than the rate of simple interest per annum
ramblers
Joined: 21 Aug 2017
Last visit: 19 Oct 2018
Posts: 66
Own Kudos:
Given Kudos: 38
Location: United States
Schools: Oxford"20 (A)
GMAT 1: 700 Q43 V42
16 Jan 2018, 19:33
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This is tricky. I initially picked E thinking that because I do not know the frequency it is compounded, I have no way of deriving the initial sum.
1) Good to know the percentage of the simple, but there are still too many unknown variables. Insufficient.
2) I initially thought that this suggested that the rate of the compound interest is 8%, and it didn't tell us anything about the way in which is was compounded. After reviewing I'm now under the impression that that takes into account the compounding scheduling, which makes it a higher effective rate of interest. However, since we still don't know what that simple interest is, this is insufficient as well.
Combine them together, you have the simple interest rate, you have the effective compound interest rate, and you have a duration and difference of interest. You can get the initial investment.
C.
I don't know how I feel about this one. I like that it's making me think critically right now and learn what sort of information I truly need, but I hope that this is more wordplay than I would ever see on the test. If I see 37 of these, I'm getting 2/37 on it for sure.
1) Good to know the percentage of the simple, but there are still too many unknown variables. Insufficient.
2) I initially thought that this suggested that the rate of the compound interest is 8%, and it didn't tell us anything about the way in which is was compounded. After reviewing I'm now under the impression that that takes into account the compounding scheduling, which makes it a higher effective rate of interest. However, since we still don't know what that simple interest is, this is insufficient as well.
Combine them together, you have the simple interest rate, you have the effective compound interest rate, and you have a duration and difference of interest. You can get the initial investment.
C.
I don't know how I feel about this one. I like that it's making me think critically right now and learn what sort of information I truly need, but I hope that this is more wordplay than I would ever see on the test. If I see 37 of these, I'm getting 2/37 on it for sure.
