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Interest

by karthikpandian19 » Mon Dec 26, 2011 7:35 pm
John invested $100 in each of the funds A and B. After one year, the value of the money in fund A was $10 higher than the value of the money in fund B. After another year, the value of the money in fund A was $25 higher than the value of the money in fund B. If the value of the money in each fund increased by a fixed interest compounded annually, what was the annual interest of fund A?

20%
30%
40%
50%
60%
How to solve this question for solution without using the PLUGGIN VALUES method?
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by ronnie1985 » Mon Dec 26, 2011 7:45 pm
Rate of interest in A = x and Rate of interest in B = y
after 1st year fund in A = 100*(1+x) and in B = 100*(1+y) = > x-y = .1
after 2 years fund in A = 100*(1+x)^2 and in B = 100*(1+y)^2 => (2+x+y)*(x-y) = 0.25 => x+y = .5
Hence x = .3 or 30 % and y = .2 or 20%.
(B) is correct
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by karthikpandian19 » Tue Dec 27, 2011 9:50 pm
OA is B
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