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100 points for $49 worth of Veritas practice GMATs FREE VERITAS PRACTICE GMAT EXAMS Earn 10 Points Per Post Earn 10 Points Per Thanks Earn 10 Points Per Upvote ## In 2001, John invest x dollars ina special account that tagged by: AAPL ##### This topic has 3 expert replies and 0 member replies ### Top Member ## In 2001, John invest x dollars ina special account that ## Timer 00:00 ## Your Answer A B C D E ## Global Stats Difficult Magoosh In 2001, John invests x dollars in a special account that yields y% simple interest annually. If he has$250 in his account in 2006 and in 2008 he has $270 in his account, what is x + y? A. 5 B. 25 C. 200 D. 205 E. 210 OA D. ### GMAT/MBA Expert GMAT Instructor Joined 08 Dec 2008 Posted: 12422 messages Followed by: 1244 members Upvotes: 5254 GMAT Score: 770 AAPL wrote: In 2001, John invests x dollars in a special account that yields y% simple interest annually. If he has$250 in his account in 2006 and in 2008 he has $270 in his account, what is x + y? A. 5 B. 25 C. 200 D. 205 E. 210 John$250 in his account in 2006 and in 2008 he has $270 in his account, So, in 2 years, John's balance increases by$20
So, the balance increases $10 EACH YEAR In 2001, John invests x dollars in a special account that yields y% simple interest annually John's balance increases$10 EACH YEAR
In 2006, John had $250 So, in 2005, John had$240
in 2004, John had $230 in 2003, John had$220
in 2002, John had $210 in 2001, John had$200
In other words, x = 200

So, John's initial investment was $200 and the simple interest is$10/year
$10/$200 = 5/100 = 5%
So, the annual interest rate is 5%
In other words, y = 5

What is x + y?
x + y = 200 + 5
= 205

Cheers,
Brent

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AAPL wrote:
Magoosh

In 2001, John invests x dollars in a special account that yields y% simple interest annually. If he has $250 in his account in 2006 and in 2008 he has$270 in his account, what is x + y?

A. 5
B. 25
C. 200
D. 205
E. 210

OA D.
John's account has $250 in 2006, i.e., after 5 years. Thus, he invested$x at the rate of y% per annum at simple interest for 5 years, which gave $(250 - x) as simple interest. => 250 - x = (x * y * 5) / 100 5000 - 20 x = xy ------(1) Since account balance in 2008 is$270 and that in 2006 is $250, he earned$20 as simple interest on $x for 2 years at the rate of y% per annum. => 20 = (x * y * 2) /100 xy = 1000 ------(2) Plugging-in the value of xy in equation (1), we get 5000 - 20 x = 1000 => x = 200 Plugging-in the value of x in equation (2), we get x = 5 Thus, x + y = 205 The correct answer: D Hope this helps! -Jay _________________ Manhattan Review GMAT Prep Locations: New York | Singapore | London | Dubai | and many more... Schedule your free consultation with an experienced GMAT Prep Advisor! Click here. ### GMAT/MBA Expert GMAT Instructor Joined 25 Apr 2015 Posted: 1776 messages Followed by: 14 members Upvotes: 43 AAPL wrote: Magoosh In 2001, John invests x dollars in a special account that yields y% simple interest annually. If he has$250 in his account in 2006 and in 2008 he has $270 in his account, what is x + y? A. 5 B. 25 C. 200 D. 205 E. 210 Since he has$250 in his account in 2006 and $270 in 2008, it must be true that the amount of interest is$20 during these two years. Since itâ€™s a simple interest, it must mean the amount of interest is $10 per year. Therefore, in 2001, 5 years before 2006, it must have accumulated$50 in interest, which means the amount in 2001 is $200. So x = 200. Since 10/200 = 5/100 = 5%, y = 5. Therefore, x + y = 205. Answer: D _________________ Scott Woodbury-Stewart Founder and CEO • Get 300+ Practice Questions 25 Video lessons and 6 Webinars for FREE Available with Beat the GMAT members only code • Free Practice Test & Review How would you score if you took the GMAT Available with Beat the GMAT members only code • 5 Day FREE Trial Study Smarter, Not Harder Available with Beat the GMAT members only code • 1 Hour Free BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Magoosh Study with Magoosh GMAT prep Available with Beat the GMAT members only code • Free Trial & Practice Exam BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Free Veritas GMAT Class Experience Lesson 1 Live Free Available with Beat the GMAT members only code • 5-Day Free Trial 5-day free, full-access trial TTP Quant Available with Beat the GMAT members only code • Award-winning private GMAT tutoring Register now and save up to$200

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