aarzoo wrote:Rs.6,100/- was partly invested in scheme A at 10% per annum compound interest(compounded annually) for 2 years and partly in scheme B at 10% per annum simple interest for 4 years. Both the scheme pay equal interests. How much was invested in scheme A?
Options are:-
1.3,750
2.4,500
3.4,000
4.3,200
5.5,000
We can PLUG IN THE ANSWERS, which represent the amount in invested in A.
Correct answers to compound interest problems are typically VERY ROUND NUMBERS.
Here, the correct answer is likely to be either C or E.
Answer choice C: 4000 in A, implying 2100 in B
Scheme A:
First-year interest = 10% of 4000 = 400.
Second-year interest = (10% of original investment) + (10% of first-year interest) = (10% of 4000) + (10% of 400) = 400+40 = 440.
Total interest = 400+440 = 840.
Scheme B:
Since 10% interest is earned each year, the total interest over 4 years = (4)(10% of 2100) = (4)(210) = 840.
Success!
The two schemes earn the same interest.
The correct answer is
C.
Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at
[email protected].
Student Review #1
Student Review #2
Student Review #3
