Oct 20 07:00 AM PDT  09:00 AM PDT Get personalized insights on how to achieve your Target Quant Score. Oct 22 08:00 PM PDT  09:00 PM PDT On Demand for $79. For a score of 4951 (from current actual score of 40+) AllInOne Standard & 700+ Level Questions (150 questions) Oct 23 08:00 AM PDT  09:00 AM PDT Join an exclusive interview with the people behind the test. If you're taking the GMAT, this is a webinar you cannot afford to miss! Oct 26 07:00 AM PDT  09:00 AM PDT Want to score 90 percentile or higher on GMAT CR? Attend this free webinar to learn how to prethink assumptions and solve the most challenging questions in less than 2 minutes.
Author 
Message 
TAGS:

Hide Tags

Manager
Joined: 06 Apr 2010
Posts: 103

This year Henry will save a certain amount of his income
[#permalink]
Show Tags
12 Sep 2010, 07:21
Question Stats:
49% (03:00) correct 51% (03:01) wrong based on 852 sessions
HideShow timer Statistics
This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year? A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\)
Official Answer and Stats are available only to registered users. Register/ Login.




Math Expert
Joined: 02 Sep 2009
Posts: 58445

This year Henry will save a certain amount of his income
[#permalink]
Show Tags
12 Sep 2010, 09:01
udaymathapati wrote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?
A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\) Let \(x\) be the fraction of saving, and \(I\) be the income income. Set the equation: \(x*I*(1+r)=\frac{(1x)*I}{2}\), \(I\) cancels out. Here LHS is "the amount he has available to spend next year", which according to the stem equals to RHS: "half the amount that he spends this year". \(x=\frac{1}{3+2r}\) Answer: E.
_________________




Senior Manager
Status: Time to step up the tempo
Joined: 24 Jun 2010
Posts: 328
Location: Milky way
Schools: ISB, Tepper  CMU, Chicago Booth, LSB

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
12 Sep 2010, 10:40
My approach:
Table  Total Income  Saving  Spends  X  a  Xa 
Given: Amount available next year is 'a' times \((r+1)\) => \(a(r+1)\). Question: Fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year. Setting up the equation => \((Xa)/2 = a(r+1)\) \(X  a = 2ar+ 2a\) \(X = 2ar +3a\) Fraction of the income that Henry should save this year is \((a/X)\) which is equal to \(1/(2r+3)\).
_________________
Support GMAT Club by putting a GMAT Club badge on your blog




Manager
Joined: 11 Jul 2010
Posts: 166

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
22 Oct 2010, 11:26
Saving this year = S Spending this year = E
Next year spend = S (1+r)
Given, S(1+r) = E/2
2 + 2r = E/S
2 + 2r + 1 = E/S + 1 3+2r = E+S/S
S/E+S = 1/(3+2r)



SVP
Status: Three Down.
Joined: 09 Jun 2010
Posts: 1824
Concentration: General Management, Nonprofit

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
27 Dec 2010, 19:46
tonebeeze wrote: I'm having trouble charting this problem out. Can someone help? Thanks.
This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he has available to spend will be equal to half the amount that he spends this year?
(A) \(1/r +2\) (B) \(1/2r +2\) (C) \(1/3r +2\) (D) \(1/r +3\) (E) \(1/2r +3\) Let's say that his income is I. So he saves S and spends E. I = E + S For each dollar he saves today he'll have 1+r dollars to spend next year, so if he saves S, he'll have \(S(1+r)\) dollars to spend next year. But its given that \(S(1+r) = \frac{E}{2}\) which means that \(2S (1+r) = E\). Thus, \(S = \frac{E}{2(1+r)}\) and \(S+E = (E)(\frac{1}{2+2r} + 1) = (E)(\frac{3+2r}{2+2r})\) Savings as a fraction of his income is \(\frac{S}{I} = \frac{S}{S+E} = \frac{\frac{E}{2+2r}}{\frac{E(3+2r)}{2+2r} = \frac{1}{3 + 2r}\) Hope this is clear.



Veritas Prep GMAT Instructor
Joined: 16 Oct 2010
Posts: 9706
Location: Pune, India

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
25 Apr 2012, 11:13
udaymathapati wrote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?
A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\) Responding to a pm: There is no 'best' way to solve a problem, in my opinion. The best way for you depends on what you are comfortable with. You can follow Bunuel's algebraic approach here (by taking x as the fraction of saving) or you can plug in values for r and check (or do something else... I would like to plug in values for r as shown in my second method) Say r = 0 Whatever he saves this year, he has only that next year so he must save 1/3 this year (so that he spends 2/3 this year) Only options D and E give 1/3 when r = 0. Say r = 1 Whatever he saves this year, it becomes double. This double should be half of what he spends this year. So what he spends this year should be 4 times what he saves i.e. he should save 1/5 of his income this year. Out of D and E, only E gives you 1/5 Answer E OR, preferably, look for a value of r which gives a different answer for each option right in the beginning. I would choose r = 2. Whatever he saves, it becomes 3 times. This 3 times amount must be half of what he spends this year. So what he spends this year must be 6 times of what he saves. Therefore, he saves 1/7 of his income. Only option E gives 1/7
_________________
Karishma Veritas Prep GMAT Instructor
Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options >



Manager
Joined: 07 Sep 2011
Posts: 59
Location: United States
Concentration: Strategy, International Business
WE: General Management (Real Estate)

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
26 Apr 2012, 00:18
Thanks Karishma,
I am always comfortable with number picking however in this, wasn't sure what to pick. You have explained exceptionally well.
Thanks.



Intern
Joined: 14 Jun 2012
Posts: 39

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
27 Jun 2012, 14:27
Even I went for number picking. I chose slightly different numbers and approach. I am not sure if I chose the correct path but ended up getting the same answer. It took me about 3 minutes to get there finally so I do not think my approach was the optimum one. I am going over Karishma's approach again to see if I can apply it. Let total income = 100. This year Henry saved : 50 This year Henry spent : 50 Next Year amount available to spend = 50(1+r) > (I) Per the last statement in the question stem, this amount is half of his amount spent this year. Hence, overall amount that we should get for a value of r is (1/2) Also we get that, therefore 50(1+r)=25. Solving for r gives r= (1/2) Plug in r=(1/2) in the answer choices to see which option gives answer as (1/2). Only E gives this answer.  Going over my response now, I realized that I might not follow my above approach again.
_________________
My attempt to capture my BSchool Journey in a Blog : tranquilnomadgmat.blogspot.com
There are no shortcuts to any place worth going.



Intern
Joined: 04 Dec 2011
Posts: 17
GMAT 1: 660 Q49 V31 GMAT 2: 750 Q50 V41

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
26 Sep 2012, 12:42
There is one more way to these kind of question :By using nbr.
Lets say u have saved 10$. The next year it will be lets saey y=10(1+1)=20 [r=1] As question suggest the spending is twice lets say Z=2*20=40 So the total income will be 40+10=50$ and 10/50=1/5=1/(2*1+3)=1/(2*r+3)..
It may looks lenghthy while explaining but the very simple..
Please give ur comments or suggestion.



Senior Manager
Joined: 13 Aug 2012
Posts: 401
Concentration: Marketing, Finance
GPA: 3.23

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
01 Dec 2012, 20:59
Let \(I\) be the income and \(S\) be the savings this year. Let \(0\) be the income and \(S(1+r)\) the money available for spending next year. The money available next year is half of the money spent this year. \(S(1+r)=\frac{IS}{2}\) Calculate I: \(3S + 2Sr=I\) We are looking for S/I: \(\frac{S}{S(3+2r)}=\frac{1}{3+2R}\)
_________________
Impossible is nothing to God.



Senior Manager
Status: Verbal Forum Moderator
Joined: 17 Apr 2013
Posts: 445
Location: India
GMAT 1: 710 Q50 V36 GMAT 2: 750 Q51 V41 GMAT 3: 790 Q51 V49
GPA: 3.3

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
09 Oct 2013, 00:03
Bunuel wrote: udaymathapati wrote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?
A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\) \(x\) fraction of saving,\(I\) income. Set the equation: \(x*I*(1+r)=\frac{(1x)*I}{2}\), \(I\) cancels out. Here LHS is "the amount he has available to spend next year", which according to the stem equals to RHS: "half the amount that he spends this year". \(x=\frac{1}{3+2r}\) Answe: E. How did you make the LHS equation, whats the logic behind it?
_________________
Like my post Send me a Kudos It is a Good manner.My Debrief: http://gmatclub.com/forum/howtoscore750and750imovedfrom710to189016.html



Math Expert
Joined: 02 Sep 2009
Posts: 58445

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
09 Oct 2013, 02:40
honchos wrote: Bunuel wrote: udaymathapati wrote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?
A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\) \(x\) fraction of saving,\(I\) income. Set the equation: \(x*I*(1+r)=\frac{(1x)*I}{2}\), \(I\) cancels out. Here LHS is "the amount he has available to spend next year", which according to the stem equals to RHS: "half the amount that he spends this year". \(x=\frac{1}{3+2r}\) Answe: E. How did you make the LHS equation, whats the logic behind it?
We are told that "next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend". So, if he saves $10, then the amount available to spend next year is 10(1+r). The amount saved this year = x*I, where x is the fraction of savings (say 1/2) and I is the income. The amount available to spend next year = x*I*(1+r). Hope it's clear.
_________________



Intern
Joined: 17 Sep 2013
Posts: 24
Location: United States
Concentration: Economics, Statistics
GPA: 3.36
WE: Analyst (Health Care)

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
09 Apr 2014, 14:23
You can pick smart numbers. Let's first set r = .1 (10%) Let's say he spent $110 this year. We want him to have $55 ($110/2) to spend next year. The amount he would have to save this year would be given by x(1 + .1) = $55, solving for x gives us x = $50 Therefore his income last year was $110 + $50 = $160 The fraction of his income he saved was 50/160 = 1 / 3.2 Plug in .1 for each of the answer choices and you get E.



Intern
Joined: 10 Apr 2014
Posts: 29

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
10 Apr 2014, 13:16
honchos wrote: Bunuel wrote: udaymathapati wrote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?
A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\) \(x\) fraction of saving,\(I\) income. Set the equation: \(x*I*(1+r)=\frac{(1x)*I}{2}\), \(I\) cancels out. Here LHS is "the amount he has available to spend next year", which according to the stem equals to RHS: "half the amount that he spends this year". \(x=\frac{1}{3+2r}\) Answe: E. How did you make the LHS equation, whats the logic behind it?
Hi  probably look at the question like this that every dollar you save, your bank gives you a return of r on every dollar, so your wealth increases by a factor of (1+r) if you are saving x part of your income I, the money will increase to xI *(1+r)



Manager
Joined: 15 Aug 2013
Posts: 228

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
24 Aug 2014, 10:58
Bunuel wrote: We are told that "next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend". So, if he saves $10, then the amount available to spend next year is 10(1+r).
The amount saved this year = x*I, where x is the fraction of savings (say 1/2) and I is the income. The amount available to spend next year = x*I*(1+r).
Hope it's clear. Hi Bunuel, The statement "for each dollar that he saves this year, he will have 1 + r dollars available to spend."  how does this imply that it's (savings)*(1+r) vs. just "1+ savings". I tried to plug in numbers, or even algebra for that matter and I took 1+r to be a definite. For example: Income = 100 Savings = 10 Spent = 90 Therefore, to get 45 next year, I did 1+r=45, therefore r=44. That was obviously wrong based on your explanation above but I fail to see why we multiply savings by (1+r)? Thanks!



Manager
Joined: 07 Apr 2014
Posts: 100

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
07 Sep 2014, 00:39
udaymathapati wrote: This year Henry will save a certain amount of his income, and he will spend the rest. Next year Henry will have no income, but for each dollar that he saves this year, he will have 1 + r dollars available to spend. In terms of r, what fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year?
A. \(\frac{1}{(r+2)}\) B. \(\frac{1}{2r+2}\) C. \(\frac{1}{3r+2}\) D. \(\frac{1}{r+3}\) E. \(\frac{1}{2r+3}\) T.I = Sp+Sa.. but for each dollar that he saves this year, he will have 1 + r dollars available to spend > so Sa(1+r). fraction of his income should Henry save this year so that next year the amount he was available to spend will be equal to half the amount that he spends this year> (T.ISa)/2 = Sa(1+r) => T.I  Sa = 2Sa(1+r) T.I = 2Sa(1+r)+Sa ==> Sa(2(1+r) +1) T.I=Sa(2r+3) since asked for fraction, Sa/T.I = 1/ (2r+3).. first i have tried with number plug in with 150  T.I & saving as 50 but got an wrong answer D later with the help of Bunuel's post got an idea on this. could someone please share similar problems for practice?



Manager
Joined: 20 Dec 2013
Posts: 224
Location: India

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
06 Oct 2014, 22:53
Let the total income be \(x\) and the saved income be \(y\). That means the income spent=\(xy\). The question asks us to find out \(y/x\) such that \(y(1+r)=(xy)/2\). Solving this equation we can get \(y/x=1/(3+2r)\). Answer E.



Manager
Joined: 14 Oct 2014
Posts: 66
Location: United States

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
17 Nov 2014, 22:20
The question asks what fraction of income, or in other words, what percent of income henry should save. That means, that income is 100% or income is equal 1. So the fraction that henry will spend this year will be 1x, where x is the amount he will save. The problem says that next year henry will have 1r for every dollar of x, which can be expressed x(1r)> henry's spending dollars for next year. the problem also says, that this amount has to be equal to 1/2 of (1x). Thus, the equation will look like this: (1x)/2 = x(1+r) 1x = 2x(1+r) 1 = 2x + 2xr + x 1 = 3x + 2xr 1 = x(3+2r) 1/(3+2r)=x Answer E



Senior Manager
Status: Math is psychological
Joined: 07 Apr 2014
Posts: 402
Location: Netherlands
GMAT Date: 02112015
WE: Psychology and Counseling (Other)

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
04 Jan 2015, 08:43
This is what I didn't inderstand: Next year spend = S (1+r)
If someone would like to explain. Why do we multiply?
Thank you.



Veritas Prep GMAT Instructor
Joined: 16 Oct 2010
Posts: 9706
Location: Pune, India

Re: This year Henry will save a certain amount of his income
[#permalink]
Show Tags
04 Jan 2015, 21:53
pacifist85 wrote: This is what I didn't inderstand: Next year spend = S (1+r)
If someone would like to explain. Why do we multiply?
Thank you. "but for each dollar that he saves this year, he will have 1 + r dollars available to spend." Say, he saves 1 dollar this year; next year he has 1 + r dollars to spend. Say, he saves 2 dollars this year; next year he has (1+r)+(1+r) = 2*(1+r) dollars to spend. Say, he saves 3 dollars this year; next year he has (1+r)+(1+r)+(1+r) = 3*(1+r) dollars to spend. So if he saves S dollars, next year he will have S*(1+r) dollars to spend.
_________________
Karishma Veritas Prep GMAT Instructor
Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options >




Re: This year Henry will save a certain amount of his income
[#permalink]
04 Jan 2015, 21:53



Go to page
1 2
Next
[ 36 posts ]



