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by treker » Sun Jul 03, 2011 4:12 am
After a period of 3 years, how much greater is the interest income on $5,000 invested in investment A, which yields X percent interest compounded annually, than on the same amount invested in investment B, which yields Y percent simple annual interest?
(1) After 1 year, the interest income from A is $50 more than from B.
(2) After 2 years, the total interest income from A is $300 more than from B.

Please explain thy answers.
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Source: — Data Sufficiency |
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by amit2k9 » Mon Jul 04, 2011 12:42 am
a 5000*x*1/100 = 5000* y * 1/100 + 50

thus x= y+1. not sufficient.

b 5000[(1-x/100)^2-1] = 5000*y*2/100 + 300

5000[ 1-2*x/100 + (x/100)^2 - 1] = 100( y+3)

50x^2 + 100x = 100(y+3)

x(x+2) = 2(y+3) not sufficient.

a+b
(y+1) (y+3) = 2(y+3)
thus y = -3 or 1. x = -2 or 2.

thus y = 1 and x=2.
C is sufficient.
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