Connie has two investments, A and B. Her income from A, which pays 6%,

Question

Connie has two investments, A and B. Her income from A, which pays 6%, is $10,000 more than her income from B, which pays 4%. If Connie has $750 more invested in A than B, what is the TOTAL amount of Connie's two investments?

A. $497,750
B. $498,500
C. $996,250
D. $1,006,250
E. $1,026,160

Show Answer

Official Answer

C

A. $497,750
B. $498,500
C. $996,250
D. $1,006,250
E. $1,026,160

CrackverbalGMAT · Answer

Simple Interest =  \frac{(P * r * t) }{ 100}

Where P is the Principal, r = rate and t = time in years

Here Time is assumed for a year, t = 1

Let Connies Investment in B = x
Then her Investment in A = (750 + x)

Income from A = Interest =  \frac{(750+x) * 6 * 1}{100}

Income from B =  \frac{(x * 4 * 1)}{100}

Difference in Incomes = 10000 =  \frac{(750+x) * 6 * 1}{100}  -  \frac{(x * 4 * 1)}{100}

Solving for x:

10000 * 100 = 6(750 + x) - 4x

1000000 = 4500 + 6x - 4x

2x = 995500

x = 497750

Therefore Total Amount Invested = x + 750 + x = 2x + 750 = (2 * 497750) + 750 = 996250

Option C

Arun Kumar

Lipun · Answer

A = B + 750 -----(1)
=> A + B = 2B + 750 (To find)

Now, 0.06*A = 0.04*B + 10^4
=> 6*A = 4*B + 10^6 -----(2)

eqn (2) / eqn (1)
=> 6 = (4*B + 10^6)/(B + 750)
=> 6*B + 6*750 = 4*B + 10^6
=> 2*B + 750 = 10^6 - 5*750
=> A + B = 10^6 - 3750 = 996250

Ans: C

elavendan1 · Answer

In the question, it is mentioned that Connie has two investments, A and B. Not necessarily, these two investment amounts are equal. So, ideally we should be considering the investment from B as y. Am I missing something here?

CrackverbalGMAT · Answer

______________________________________________________________

Hi elavendan1. In the question it says Connie has 750 more invested in A than in B. This helps us have the investments related through a common variable x.

If B is x A will be 750 + x.

Arun Kumar

bumpbot · Answer

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Connie has two investments, A and B. Her income from A, which pays 6%,

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Connie has two investments, A and B. Her income from A, which pays 6%,

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