Alberto invested a total of $50,000 in 2 new funds-a stock fund and

Question

Alberto invested a total of $50,000 in 2 new funds-a stock fund and a bond fund. After 1 year, the stock fund had increased 13% in value and the bond fund had increased 18% in value. Was the amount of increase in the bond fund greater than $5,000?

(1) The amount of increase in the stock and bond funds combined was $8,000.
(2) The dollar amount of increase in the stock fund was less than $3,900.

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Official Answer

A

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stne · Accepted Answer

Initially s+b=50,000 After 1 year the total value becomes = .13s+.18b We need to find whether .18b > 5000 or basically we need the value of b. (1) The amount of increase in the stock and bond funds combined was $8,000. .13s+.18b=8000 Also we know s+b =50,000 Thus we have two distinct equations and two unknowns, hence we can solve for the value of b . SUFF. (2) The dollar amount of increase in the stock fund was less than $3,900 . .13s < 3900 Thus s<30,000 . Hence b > 20,000 If b = 20,100 then NO. If b = 40,000 then YES. INSUFF. Ans A Hope it helped.

sayan640 · Answer

Using first statement,

The amount of increase in both = 8000
8000 / 50000 * 100 = 16 % over all increase.

Using alligation,
Ratio of Stock and bond = 2/3
Increase in bond fund = 3/5 * 8000 = 4800 ..The answer is NO. Sufficient ; first statement is Sufficient

USing Second statement ,
Let amount invested in Stock = x
13*x / 100 < 3900
x<30,000
Hence the amount invested in bond > 20000
The increase is >= 20000* 18 /100 = 3600

So the amount of increase in the bond fund is greater than 3600 . It can be more than 5000 or not more than 5000.
Hence statement 2 is not sufficient.
A is the answer.

GMATinsight

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SundayRoast · Answer

Hi, for statement 1 given the $8000 can be split in ways which lead to bonds returning both more than and less than $5000, how can we say it is sufficent? Thanks

stne · Answer

We know total invested in stocks and bonds, thus   s+b = 50,000

Also from (i) we know  .13s+.18b=8000

Here we have 2 distinct equations and 2 unknowns. We can solve for the unknowns. Hope it helps.

GMATinsight · Answer

S + B = 50000

Increase in Bond fund = 18% of B

Question: Is (18/100)*B > 5000
 Question: Is B > 27777.7?

Statement 1: The amount of increase in the stock and bond funds combined was $8,000. 
i.e. 13% of (50000-B)+ 18% of B > 8000
i.e. B > 30000 (Definitely YES)
SUFFICIENT

Statement 2: The dollar amount of increase in the stock fund was less than $3,900. 
NOT SUFFICIENT

Answer: Option A

bumpbot · Answer

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Alberto invested a total of $50,000 in 2 new funds-a stock fund and

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