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A certain bank has ten branches. What is the total amount of assets under management at the bank?

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A certain bank has ten branches. What is the total amount of assets under management at the bank?

by BTGmoderatorDC » Tue May 05, 2020 5:56 pm

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A certain bank has ten branches. What is the total amount of assets under management at the bank?

(1) There is an average of 400 customers per branch. When each branch’s average assets under management per customer is computed, these values are added together and this sum is divided by 10. The result is $400,000 per customer.

(2) The bank has a total of 4,000 customers. When the total assets per branch are added up, each branch is found to manage, on average, 160 million dollars in assets.


OA B

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Re: A certain bank has ten branches. What is the total amount of assets under management at the bank?

by Jay@ManhattanReview » Wed May 06, 2020 11:58 pm

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BTGmoderatorDC wrote: ↑
Tue May 05, 2020 5:56 pm
 A certain bank has ten branches. What is the total amount of assets under management at the bank?

(1) There is an average of 400 customers per branch. When each branch’s average assets under management per customer is computed, these values are added together and this sum is divided by 10. The result is $400,000 per customer.

(2) The bank has a total of 4,000 customers. When the total assets per branch are added up, each branch is found to manage, on average, 160 million dollars in assets.

OA B

Source: Manhattan Prep
The total amount of assets under management would be Total no. of customers*Average amount of asset

Let's take each statement one by one.

(1) There is an average of 400 customers per branch. When each branch’s average assets under management per customer is computed, these values are added together and this sum is divided by 10. The result is $400,000 per customer.

=> Total no. of customers = 400*10 = 4,000

Since each branch would have a different amount of assets with a customer, the application of a simple average to get the average amount of assets is incorrect. Here weighted average would have been applied. Since $400,000 per customer may be incorrect data, we cannot get the answer. Insufficient.

(2) The bank has a total of 4,000 customers. When the total assets per branch are added up, each branch is found to manage, on average, 160 million dollars in assets.

Figure 160 million dollars in assets is the value of the average amount of assets.

Thus, the total amount of assets under management = 160 million dollars * 10 = 1,600 million dollars

The correct answer: B

Hope this helps!

-Jay
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