BREAKING: Target Test Prep releases Brand New 2026 On Demand GMAT prep course

Redeem

CI and Stats

This topic has expert replies
Post new topic Post Reply
Previous Topic Next Topic
Junior | Next Rank: 30 Posts
Posts: 10
Joined: Mon Mar 21, 2011 9:27 am

CI and Stats

by vishalchaudhury » Sat Apr 16, 2011 11:37 pm
Q. Someone plans to invest $10,000 in an account paying 3% annual interest and compounded semi-annually. How much must he invest in another account paying 5% annual interests and compounded quarterly so that his annual income from the 2 accounts in the first year are the same.

The only doubt here is whether annual income means the total amount or the interest?

Q. The mean of a list of numbers is m and the deviation (not sure here) is n. It is known that 68% of the numbers are within m and n, what is the percentage of the numbers that are less (or more) than m+n?

Q. A total of $200,000 was deposited at a fixed annual interest rate which is compounded quarterly. What is the interest of the first month?
1) The interest in the second month is 1 percent more than first month
2) The interest in the second month is $2 more than first month
Top
Source: — Problem Solving |
User avatar
Legendary Member
Posts: 965
Joined: Thu Jan 28, 2010 12:52 am
Thanked: 156 times
Followed by:34 members
GMAT Score:720

by vineeshp » Mon Apr 18, 2011 6:16 pm
Q 1) I think Income means interest what you earn. (Best way to find out is to assume one of the two and solve the question. You will know when your answer goes wrong.)
Vineesh,
Just telling you what I know and think. I am not the expert. :)
Top
Master | Next Rank: 500 Posts
Posts: 298
Joined: Tue Feb 16, 2010 1:09 am
Thanked: 2 times
Followed by:1 members

by Deepthi Subbu » Mon Apr 18, 2011 10:05 pm
Is the answer for question 2 is C?
Top

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 2623
Joined: Mon Jun 02, 2008 3:17 am
Location: Montreal
Thanked: 1090 times
Followed by:355 members
GMAT Score:780

by Ian Stewart » Mon Apr 18, 2011 11:17 pm
The two compound interest questions in your post are not even close to being realistic GMAT questions. Where are they from? The first requires a calculator to solve, and the second doesn't make any mathematical sense. Anyone preparing for the GMAT should ignore them.

Only the second question even resembles a real GMAT question, and for that question to be solvable, you need to be told that the distribution of data is 'symmetric'.
For online GMAT math tutoring, or to buy my higher-level Quant books and problem sets, contact me at ianstewartgmat at gmail.com

ianstewartgmat.com
Top
Junior | Next Rank: 30 Posts
Posts: 10
Joined: Mon Mar 21, 2011 9:27 am

by vishalchaudhury » Tue Apr 19, 2011 1:43 am
Deepthi Subbu wrote:Is the answer for question 2 is C?
Can you please explain the approach?
Top
Junior | Next Rank: 30 Posts
Posts: 10
Joined: Mon Mar 21, 2011 9:27 am

by vishalchaudhury » Tue Apr 19, 2011 1:46 am
Ian Stewart wrote:The two compound interest questions in your post are not even close to being realistic GMAT questions. Where are they from? The first requires a calculator to solve, and the second doesn't make any mathematical sense. Anyone preparing for the GMAT should ignore them.

Only the second question even resembles a real GMAT question, and for that question to be solvable, you need to be told that the distribution of data is 'symmetric'.
Hi Ian,

Does the 3rd Q not make sense because the interest per month will be same till compounding is done? Can you please help me understand the 2nd question?
Top

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 2623
Joined: Mon Jun 02, 2008 3:17 am
Location: Montreal
Thanked: 1090 times
Followed by:355 members
GMAT Score:780

by Ian Stewart » Tue Apr 19, 2011 9:33 am
vishalchaudhury wrote:
Hi Ian,

Does the 3rd Q not make sense because the interest per month will be same till compounding is done? Can you please help me understand the 2nd question?
Yes, it's not clear what they mean by 'interest in the first month' if the interest is compounded quarterly, which normally means that interest is applied once every three months. It's not even clear why the compounding should be relevant if we only look at a two month period. The question just doesn't make any sense.

vishalchaudhury wrote: Q. The mean of a list of numbers is m and the deviation (not sure here) is n. It is known that 68% of the numbers are within m and n, what is the percentage of the numbers that are less (or more) than m+n?
I don't know why you say 'not sure here' when reprinting the question - where are you getting these questions from? It's obviously impossible to answer a question if you don't even know what the question is asking.

The question ought to say that the set of data is distributed 'symmetrically'; otherwise it cannot be answered. If 68% of values are then within one standard deviation of the mean (so between m-n and m+n), then 32% (the rest) of values are more than one standard deviation away from the mean (so either greater than m+n or less than m-n). If the distribution is symmetric, half of these will be greater than m+n, so 16% of values will be greater than m+n, and thus 84% will be less than m+n.

There's a technicality with the wording that I've ignored here, since if the question were properly worded, you'd be told to ignore it: the question needs to rule out the possibility that some values are exactly equal to m+n, which in a small set might have some effect on the answer.
For online GMAT math tutoring, or to buy my higher-level Quant books and problem sets, contact me at ianstewartgmat at gmail.com

ianstewartgmat.com
Top
Post new topic Post Reply
• Page 1 of 1