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Statement 1: Could 1 friend, could have 2 friends...etc... Not Sufficient
Statement 2: Same logic as the first statement. Could have given 1 piece of candy out, could have given 2 pieces of candy out..etc.. Not Sufficient.
Statements 1&2 Together: Could have 1 friend (total of 15 pieces of candy), Could have 2 friends (total of 23 pieces of candy)...etc... Not sufficient.
E.
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So basically this question is testing the concept of remainders?
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Yes divisibility & remainders.
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So basically this question is testing the concept of remainders?

Yes, you can easily express it in remainder terms.

N = QD + R

N - Total candy she had at the beginning
Q - No. of friends (the quotient)
D - No of candies given to each friend (the divisor)
R - No of candies she is left with (the remainder)

To get the value of N, you need to know Q, D and R.
Statement 1 gives you D and statement II gives you R.
You still don't have Q i.e. the number of friends so you cannot find N.

Answer (E)
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(1) Sally gave each friend 8 pieces of candy

Let number of friends be x
Sally gave away 8x candy. We have no idea how many are still left with her and how many she gave away.
Not sufficient

(2) Sally had 7 pieces of candy left after giving candy to her friends.
This doesn't tell us how many she gave away

(1)+(2) - She had 8x+7 candies. We still do not know the exact number of candies as we don'tknow how many friends she gave the candies to.
Hence both are not sufficient. (E)
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