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06 Apr 2026, 19:00
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D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
72% (01:48) correct
28%
(01:33)
wrong
based on 67
sessions
History
Date
Time
Result
Not Attempted Yet
Today, Laura invested a total of $12,500 at two banks. She invested part of the money at Bank A, which pays 9% annual interest compounded annually, and the remainder at Bank B, which pays 8% annual interest compounded semiannually. How much did Laura invest in Bank A?
(1) After 1 year, the total value of Laura’s two investments at the banks will be $13,541.
(2) After 2 years, the amount in the Bank B investment will be $8,728.34 greater than the amount in the Bank A investment.
(1) After 1 year, the total value of Laura’s two investments at the banks will be $13,541.
(2) After 2 years, the amount in the Bank B investment will be $8,728.34 greater than the amount in the Bank A investment.
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14 Apr 2026, 02:15
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GMAT Club Official Solution:
Today, Laura invested a total of $12,500 at two banks. She invested part of the money at Bank A, which pays 9% annual interest compounded annually, and the remainder at Bank B, which pays 8% annual interest compounded semiannually. How much did Laura invest in Bank A?
Use the compound interest formula:
Final balance = Principal * (1 + r / (100C))^(Ct)
where
r = annual interest rate as a percent
C = number of compounding periods per year
t = number of years
Here:
Bank A: C = 1, r = 9
Bank B: C = 2, r = 8
Let x be the amount Laura invested in Bank A. Then 12,500 - x is the amount invested in Bank B.
(1) After 1 year, the total value of Laura’s two investments at the banks will be $13,541.
After 1 year:
Bank A value = x * (1.09)
Bank B value = (12,500 - x) * (1.04)^2
So (1) gives:
x * 1.09 + (12,500 - x) * (1.04)^2 = 13,541
This is one linear equation in one variable x, so x can be determined uniquely. Sufficient.
(2) After 2 years, the amount in the Bank B investment will be $8,728.34 greater than the amount in the Bank A investment.
After 2 years:
Bank A value = x * (1.09)^2
Bank B value = (12,500 - x) * (1.04)^4
(2) says that the Bank B amount is 8,728.34 greater than the Bank A amount, so:
(12,500 - x) * (1.04)^4 - x * (1.09)^2 = 8,728.34
This is again one linear equation in one variable x, so x can be determined uniquely. Sufficient.
Answer: D.
Today, Laura invested a total of $12,500 at two banks. She invested part of the money at Bank A, which pays 9% annual interest compounded annually, and the remainder at Bank B, which pays 8% annual interest compounded semiannually. How much did Laura invest in Bank A?
Use the compound interest formula:
Final balance = Principal * (1 + r / (100C))^(Ct)
where
r = annual interest rate as a percent
C = number of compounding periods per year
t = number of years
Here:
Bank A: C = 1, r = 9
Bank B: C = 2, r = 8
Let x be the amount Laura invested in Bank A. Then 12,500 - x is the amount invested in Bank B.
(1) After 1 year, the total value of Laura’s two investments at the banks will be $13,541.
After 1 year:
Bank A value = x * (1.09)
Bank B value = (12,500 - x) * (1.04)^2
So (1) gives:
x * 1.09 + (12,500 - x) * (1.04)^2 = 13,541
This is one linear equation in one variable x, so x can be determined uniquely. Sufficient.
(2) After 2 years, the amount in the Bank B investment will be $8,728.34 greater than the amount in the Bank A investment.
After 2 years:
Bank A value = x * (1.09)^2
Bank B value = (12,500 - x) * (1.04)^4
(2) says that the Bank B amount is 8,728.34 greater than the Bank A amount, so:
(12,500 - x) * (1.04)^4 - x * (1.09)^2 = 8,728.34
This is again one linear equation in one variable x, so x can be determined uniquely. Sufficient.
Answer: D.
General Discussion
BongBideshini
Joined: 25 May 2021
Last visit: 22 Apr 2026
Posts: 136
Given Kudos: 77
Location: India
Concentration: Entrepreneurship, Marketing
Schools: HBS '27 Stanford '27 Wharton '27 Sloan '27
GPA: 3.8
WE:Engineering (Government)
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07 Apr 2026, 00:01
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Let's assume Laura invested x at Bank A
Statement 1:
1.09x + (12500-x)(1.04)^2 = 13,541
We can get x by solving the equation
Sufficient
Statement 2:
(12500-x)(1.04)^4 - x(1.09)^2 = 8728.34
We can get x by solving the equation
Sufficient
Ans (D)
Statement 1:
1.09x + (12500-x)(1.04)^2 = 13,541
We can get x by solving the equation
Sufficient
Statement 2:
(12500-x)(1.04)^4 - x(1.09)^2 = 8728.34
We can get x by solving the equation
Sufficient
Ans (D)
Bunuel
