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24 Jan 2026, 05:45
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B
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:
64% (01:32) correct
36%
(01:29)
wrong
based on 85
sessions
History
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Time
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Not Attempted Yet
Will the interest earned on an investment of $4360 in fund X be greater than the same investment in fund Y if the period of investment is 3 years for each?
(1) In the first year, type X offers an interest payment of $152 for every $1000 invested and type Y offers an interest payment of $73 for every $500 invested.
(2) Type X offers a rate of simple interest of 15.2% per annum and type Y offers a rate of interest of 14.6% per annum compounded annually.
Source: Veritas Prep
(1) In the first year, type X offers an interest payment of $152 for every $1000 invested and type Y offers an interest payment of $73 for every $500 invested.
(2) Type X offers a rate of simple interest of 15.2% per annum and type Y offers a rate of interest of 14.6% per annum compounded annually.
Source: Veritas Prep
21 May 2026, 09:12
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This is a great example of a problem that tries to lure us into doing more math than we have to!
The question: We’re dealing with the same principal invested in two different funds, X and Y, for the same time period. In order to compare the interest earned, we’ll need to know the interest rate for each fund and how it’s compounded over the three year period. Keep in mind that this is a Yes/No question, so we don’t actually need to calculate the amount of interest earned — we just need to know that we could.
Statement 1: A tempting trap. Knowing the amount of interest earned makes it seem like we could calculate an interest rate. But this is only for the first year. It’s possible that the model could change in years two and three. Insufficient.
Statement 2: Here, we’re told the annual interest rate for each fund and how it’s compounded. That will be enough to calculate a comparison of interest earned between the funds — though we shouldn’t actually do that math! Sufficient.
With Statement 2 alone sufficient, the correct answer is B.
If you’re interested in a deeper dive into Data Sufficiency best practices, ManhattanPrep offers a free trial class that covers the fundamental strategies to help you crack this challenging format!
-Ally Bell
ManhattanPrep GMAT Instructor
The question: We’re dealing with the same principal invested in two different funds, X and Y, for the same time period. In order to compare the interest earned, we’ll need to know the interest rate for each fund and how it’s compounded over the three year period. Keep in mind that this is a Yes/No question, so we don’t actually need to calculate the amount of interest earned — we just need to know that we could.
Statement 1: A tempting trap. Knowing the amount of interest earned makes it seem like we could calculate an interest rate. But this is only for the first year. It’s possible that the model could change in years two and three. Insufficient.
Statement 2: Here, we’re told the annual interest rate for each fund and how it’s compounded. That will be enough to calculate a comparison of interest earned between the funds — though we shouldn’t actually do that math! Sufficient.
With Statement 2 alone sufficient, the correct answer is B.
If you’re interested in a deeper dive into Data Sufficiency best practices, ManhattanPrep offers a free trial class that covers the fundamental strategies to help you crack this challenging format!
-Ally Bell
ManhattanPrep GMAT Instructor
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