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Bob invested $2000 in fund A and $1000 in fund B. Over the next two years, the money in Fund A earned a total interest of 12 percent for the two years combined and the money in fund B earned 30 percent annual interest compounded annually. Two years after Bob made these investments. Bob's investment in fund A was worth how much more than his investment in fund B?
A. $500
B. $550
C. $600
D. $650
E. $700
OA B.
Bob invested $2000 in fund A and $1000 in fund B. Over the
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Note that Fund A earned a total interest of 12 percent for the two years combined; it means that the total interest for two years = 2000*12% = $240. You need not take the number of years (2 years) into consideration!AAPL wrote:GMAT Prep
Bob invested $2000 in fund A and $1000 in fund B. Over the next two years, the money in Fund A earned a total interest of 12 percent for the two years combined and the money in fund B earned 30 percent annual interest compounded annually. Two years after Bob made these investments. Bob's investment in fund A was worth how much more than his investment in fund B?
A. $500
B. $550
C. $600
D. $650
E. $700
OA B.
Amount received for fund B after 2 years = 1000*(1 + 30%)^2 = 1000*(1.30^ = 1000*1.68 = $1690.
Amount receive from fund A is greater than from fund B is more by 2000 - 1690 = $550.
The correct answer: B
Hope this helps!
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The interest earned in fund A was 2,000 x 0.12= 240 dollars, bringing his total investment in fund A to 2,240 dollars.AAPL wrote:GMAT Prep
Bob invested $2000 in fund A and $1000 in fund B. Over the next two years, the money in Fund A earned a total interest of 12 percent for the two years combined and the money in fund B earned 30 percent annual interest compounded annually. Two years after Bob made these investments. Bob's investment in fund A was worth how much more than his investment in fund B?
A. $500
B. $550
C. $600
D. $650
E. $700
Using the formula for compound interest, the final value of investment B after 2 years was:
Final value = 1,000(1 + 0.3)^2
Final value = 1,000(1.3)^2
Final Value = 1,000(1.69) = 1,690
Thus, fund A was worth 2,240 - 1,690 = 550 dollars more than fund B.
Answer: B
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Fund A after 2 years:AAPL wrote:GMAT Prep
Bob invested $2000 in fund A and $1000 in fund B. Over the next two years, the money in Fund A earned a total interest of 12 percent for the two years combined and the money in fund B earned 30 percent annual interest compounded annually. Two years after Bob made these investments. Bob's investment in fund A was worth how much more than his investment in fund B?
A. $500
B. $550
C. $600
D. $650
E. $700.
2000 + (10% of 2000) + (2)(1% of 2000) = 2000 + 200 + 2(20) = 2240.
Fund B after 1 year:
1000 + (30% of 1000) = 1000 + 300 = 1300.
Fund B after 2 years:
1300 + (30% of 1300) = 1300 + 390 = 1690.
Difference after two years:
2240 - 1690 = 550.
The correct answer is B.
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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].
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