IR question from GMATPREP - simple interest rate

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Can you pls help explain the answer to this question?



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by [email protected] » Mon May 11, 2015 9:11 am
Hi EK2014,

This prompt is certainly complex-looking, but when you pull out the essential pieces, you have the following:

1) R is 5
2) An X and a Y have to be chosen to complete the following equation:

R = (4X + 8Y)/(X+Y)

Since we know that R = 5, the equation becomes....

5 = (4X+8Y)/(X+Y)

Now we can do some algebra and simplify....

5X + 5Y = 4X + 8Y

Combine like terms....

X = 3Y

This means that the value of X MUST be 3 TIMES the value of Y. Looking through the possible values of X and Y in the table, there is only one "pair" of values that fit this restriction:

[spoiler]X = 96, Y = 32[/spoiler]

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Note that if you'd had a question involving one mixture that was 4% salt, a second that was 8% salt, and then you combined the mixtures to get one that was 5% salt, the logic would be similar. If you plot the relevant numbers, in this case the interest rates, on a number line, you'll get the following:


So we can see that the ratio of x:y is 3:1. The only numbers that have a 3:1 ratio are [spoiler]96:32[/spoiler]
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