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by TheAnuja55 » Sun Oct 14, 2012 9:28 am
For which type of investment, J or K, is the annual rate of return greater?

(1) Type J returns $115 per $1,000 invested for any one-year period and type K returns $300 per $2,500 invested for anyone-year period.
(2) The annual rate of return for an investment of type K is 12 percent.
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by gschaefer » Sun Oct 14, 2012 11:00 am
Hi TheAnuja55,

(1) From the first part of the statment on can conclude that the annual return of J is 11,5% 115/1000= 11,5%. However, the second part of the statement is not helpful since it just mentions the return per $2.500. There is no information provided about the amount which is invested in investment K. Thus, on cannot compare the rate of returns. --> INSUFFICIENT

(2)The statement only refers to investment K. Hence, on cannot compare the returns of J and K. --> INSUFFICIENT

Taking both statements together solves the problem since we know form statement (1) that the return of J is 11,5%. According to statement (2) the annual rate of return of K is 12 %. Thus 11,5 % < 12% or J < K --> SUFFICIENT

Answer: C
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by Anurag@Gurome » Sun Oct 14, 2012 5:26 pm
TheAnuja55 wrote:For which type of investment, J or K, is the annual rate of return greater?

(1) Type J returns $115 per $1,000 invested for any one-year period and type K returns $300 per $2,500 invested for anyone-year period.
(2) The annual rate of return for an investment of type K is 12 percent.
(1) Type J returns $115 per $1,000 invested for any one-year period and type K returns $300 per $2,500 invested for anyone-year period.
From here we can find the rates for both the investments and then we can find which has a higher rate of return; SUFFICIENT.

(2) The annual rate of return for an investment of type K is 12 percent.
Here we do not know about the investment J; NOT sufficient.

The correct answer is A.
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by TheAnuja55 » Sun Oct 14, 2012 8:19 pm
gschaefer wrote:Hi TheAnuja55,

(1) From the first part of the statment on can conclude that the annual return of J is 11,5% 115/1000= 11,5%. However, the second part of the statement is not helpful since it just mentions the return per $2.500. There is no information provided about the amount which is invested in investment K. Thus, on cannot compare the rate of returns. --> INSUFFICIENT

(2)The statement only refers to investment K. Hence, on cannot compare the returns of J and K. --> INSUFFICIENT

Taking both statements together solves the problem since we know form statement (1) that the return of J is 11,5%. According to statement (2) the annual rate of return of K is 12 %. Thus 11,5 % < 12% or J < K --> SUFFICIENT

Answer: C
Hello gschaefer,

The statement (2) is Insufficient which is true, since no information about the investment.
But statement (1) is sufficient since, the anual rate of return $115/$1000 for 1 year and $300/$2500 for 1 year period, both we can convert into the percentages and can calculate the comparison.

Hence the answer is A
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by gschaefer » Sun Oct 14, 2012 9:55 pm
I agree, Answer A is Sufficient. Forget my post.
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