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Difficulty:
55%
(hard)
Question Stats:
68% (02:11) correct
33%
(02:29)
wrong
based on 240
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Kyle has convinced his client to invest $10,000 in a mutual fund. Kyle projects gains of 20 percent for the first year and 10 percent for the second year. If at the end of the two year period, the value of mutual fund has actually decreased by 1 percent, what percent of the projected value of the investment was the actual value of the investment?
A. 33
B. 44
C. 75
D. 76
E. 99
_________________
A. 33
B. 44
C. 75
D. 76
E. 99
_________________
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• Tests: GMAT Club Tests | Forum Quiz
• Guides: Quantitative | Critical Reasoning | Reading Comprehension | Ultimate Quant Guide | All You Need for Quant
• Rules: Quantitative | Verbal
Hi Banuel - the question is not clear. is it 20 percent in the first year and then 10 percent of initial investment plus 20 percent. which is to say compounded growth?
also can someone please explain the solution to me?
also can someone please explain the solution to me?
GMAT 2: 750 Q49 V42
Posts: 57
Projected Value:
After 1st year: 10k + 0.2*10k = $12k
After 2nd year: 12k + 0.1*12k = $13.2k
Actual Value:
Actual Value = 10k - 0.01*10k = $9.9k
So, percent = (9900/13200)*100 = 75%
After 1st year: 10k + 0.2*10k = $12k
After 2nd year: 12k + 0.1*12k = $13.2k
Actual Value:
Actual Value = 10k - 0.01*10k = $9.9k
So, percent = (9900/13200)*100 = 75%
Consider investment = 100. As percentages would be easier to calculate on 100.
Hence after year 1, 100 --> 20% = 100 + 20 = 120
year 2, 120 --> 10% = 120 + 12 = 132
But the actual number has decreased by 1% --> 100 - 1 = 99.
Now let 132*x = 99 --> x = 99/132. divide it by 11, we get 9/12 = 3/4 = 0.75
Hence after year 1, 100 --> 20% = 100 + 20 = 120
year 2, 120 --> 10% = 120 + 12 = 132
But the actual number has decreased by 1% --> 100 - 1 = 99.
Now let 132*x = 99 --> x = 99/132. divide it by 11, we get 9/12 = 3/4 = 0.75
Bunuel
10000 x 1.2 x 1.1 = 13200 (Projected Value)
10000 x 0.99 = 9900 (Actual Value)
What percent of the projected was the actual?
(Actual/projected) x 100
=99/132
=(3/3)/(4/3) ....approximation or 9/12
=3/4
=0.75
=75%
Posts: 29
Calculations, fairly simple..... wording, not so much.
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