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Two equal sums of money are invested, one under simple interest and

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Two equal sums of money are invested, one under simple interest and  [#permalink]

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New post 10 Jul 2017, 02:42
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Two equal sums of money are invested, one under simple interest and the other under compound interest, both at the same rate of interest per annum. What is the rate of interest?

(1) The difference between the simple interest and compound interest after 2 years is $110.
(2) If the rate of interest were squared, the interest accumulated under simple interest after 2 years would have become 4 times its actual value.

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Re: Two equal sums of money are invested, one under simple interest and  [#permalink]

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New post 11 Jul 2017, 06:54
Bunuel wrote:
Two equal sums of money are invested, one under simple interest and the other under compound interest, both at the same rate of interest per annum. What is the rate of interest?

(1) The difference between the simple interest and compound interest after 2 years is $110.
(2) If the rate of interest were squared, the interest accumulated under simple interest after 2 years would have become 4 times its actual value.


Dear Bunuel,

Can you please review the wording of Statement 1? It is nonsensical that difference between interest rates is an amount of money ($). I think It should difference between amounts invested with its correspondent rates.


Thanks
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Re: Two equal sums of money are invested, one under simple interest and  [#permalink]

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New post 11 Jul 2017, 07:02
stat1 :simple interest after 2 years = 2I...,,,,,,(1)
compound interest after 2 years = I + (I + r% of I),,,,,,,(2)
(2) - (1) difference is rt/100 = 110...not suff

stat 2: direct substitution in the formula Simple interes = PRT /100 gives u the answer

ans B
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Re: Two equal sums of money are invested, one under simple interest and  [#permalink]

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New post 11 Jul 2017, 07:47
Mo2men wrote:
Bunuel wrote:
Two equal sums of money are invested, one under simple interest and the other under compound interest, both at the same rate of interest per annum. What is the rate of interest?

(1) The difference between the simple interest and compound interest after 2 years is $110.
(2) If the rate of interest were squared, the interest accumulated under simple interest after 2 years would have become 4 times its actual value.


Dear Bunuel,

Can you please review the wording of Statement 1? It is nonsensical that difference between interest rates is an amount of money ($). I think It should difference between amounts invested with its correspondent rates.


Thanks


Hi,

Simple interest means the interest accumulated on the principal. Similarly, compound interest means the interest compounded. there is nothing wrong in the statement.

Hope this helps.

My Answer: B

Statement 1 is insufficient.
Statement 2:
2Sr^2/100 = 4Sr/100
=> r(r-2)=0
=> r=2 {Since r cannot be 0}

Hence B. Bunuel please correct me if i am wrong.

--== Message from the GMAT Club Team ==--

THERE IS LIKELY A BETTER DISCUSSION OF THIS EXACT QUESTION.
This discussion does not meet community quality standards. It has been retired.


If you would like to discuss this question please re-post it in the respective forum. Thank you!

To review the GMAT Club's Forums Posting Guidelines, please follow these links: Quantitative | Verbal Please note - we may remove posts that do not follow our posting guidelines. Thank you.

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Re: Two equal sums of money are invested, one under simple interest and   [#permalink] 11 Jul 2017, 07:47
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