Hi All,
We're told that Barbara invests $2400 in the National Bank at 5%. We're asked how much additional money she must invest at 8% so that the TOTAL annual income will be equal to 6% of her entire investment. This question can be approached in a number of different ways, including by TESTing THE ANSWERS.
To start, IF Barbara invested another $2400 at 8%, then the percentage return would be equal to the average of the two percents: (5% + 8%)/2 = 13%/2 = 6.5%. This is too high though (it's supposed to be 6%). This means that Barbara would have to invest LESS than $2400 at 8%. Eliminate Answers B, D and E. With two answers remaining, we can TEST either one - if it's a match, then it's the correct answer; if it's not the match, then the remaining answer is the correct answer.
Let's TEST Answer C: $1000
IF... Barbara invests $1000 at 8%, then she'll receive (.08)($1000) = $80
$2400 at 5% = (.05)($2400) = $120
Total Interest = $80 + $120 = $200
Total Invested = $2400 + $1000 = $3400
$200/$3400 = 1/17 = a little less than 6%. This is NOT a match (we need 6% exactly), so the final Answer must be A. You can still prove that Answer A is correct with the same general arithmetic that we did above...
IF.. Barbara invests $1200 at 8%, then she'll receive (.08)($1200) = $96
$2400 at 5% = (.05)($2400) = $120
Total Interest = $96 + $120 = $216
Total Invested = $2400 + $1200 = $3600
$216/$3600 = 24/400 = 6/100 = 6%
Final Answer: A
GMAT assassins aren't born, they're made,
Rich
