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Will the interest earned on an investment of $4360 in fund X be greate

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Will the interest earned on an investment of $4360 in fund X be greate [#permalink]

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New post 29 Feb 2016, 11:01
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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.
[Reveal] Spoiler: OA

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Re: Will the interest earned on an investment of $4360 in fund X be greate [#permalink]

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New post 02 Mar 2016, 21:05
IMO D

Both gives the rate of interest from which we can find out the better value

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Re: Will the interest earned on an investment of $4360 in fund X be greate [#permalink]

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New post 02 Mar 2016, 21:25
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varundixitmro2512 wrote:
IMO D

Both gives the rate of interest from which we can find out the better value


Hi,
statement 1 does not give you the interest rate but interest earned..
We do not Know from 1 that the two or any of them is Simple Interest or Compound Interest and say it is compounded monthly or quarterly or annually..
so there may be possiblity that in longer run Y takes over X..
say the rate is 10% compunded yearly and one quarterly..
at end of first year.. the rates become 1.1 and 1.102 respectiveky ..
but in three years, it becomes 1.33 and 1.34, sice these are compounded..
so we cannot say for sure what will be the effective rates after
so ! amay not be sufficient

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Re: Will the interest earned on an investment of $4360 in fund X be greate [#permalink]

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New post 03 Mar 2016, 10:02
I would probably say B.

Stmt 1 - only tells us about interest gained in the first year, we do not know what the second or third year will offer - X could be higher, Y could be higher - insufficient

Stmt 2 - X has an SI rate of 15.2% and Y has an CI rate of 14.6%
Lets take $100 and work this out
X Y
SI -15.2% CI - 14.6%
Yr 1 115.2 114.6
Yr 2 130.4 131.33
Yr 3 145.6 150.51

so you can see that Y, with the compounded rate is higher
PS - I used a calculator to getthe actual figures

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Re: Will the interest earned on an investment of $4360 in fund X be greate [#permalink]

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Re: Will the interest earned on an investment of $4360 in fund X be greate [#permalink]

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New post 23 Sep 2017, 07:07
Bunuel wrote:
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.


To calculate interest, we need to know Rate of Interest and whether it is compound or simple and what is the frequency

Statement 1: Gives the rate but we don't know whether the rate is simple or compound and the frequency. Hence Insufficient

Statement 2: Gives the rate, mentions whether the rate is simple or compound and mentions frequency. Hence Sufficient

Option B

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Re: Will the interest earned on an investment of $4360 in fund X be greate   [#permalink] 23 Sep 2017, 07:07
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