Solutions

Get detailed explanations to advanced GMAT questions.



Question

On May 1 of last year, Jasmin invested x dollars in a new account at an interest rate of 6 percent per year, compounded monthly. If no other deposits or withdrawals were made in the account and the interest rate did not change, what is the value of x?

I. As of June 1 of last year, the investment had earned $200 in interest.

II. As of July 1 of last year, the investment had earned $401 in interest.


 

Option A:

Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient to answer the question asked.

Option B:

Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient to answer the question asked.

Option C:

BOTH statements (1) and (2) TOGETHER are sufficient to answer the question asked, but NEITHER statement ALONE is sufficient to answer the question asked.

Option D:

EACH statement ALONE is sufficient to answer the question asked.

Option E:

Statements (1) and (2) TOGETHER are NOT sufficient to answer the question asked, and additional data specific to the problem are needed.

Difficulty Level

Easy

Solution

Option D is the correct answer.


Option Analysis

Interest Rate per month: 6%/12 months = 0.5% (monthly)

Statement I is sufficient: As of June 1 of last year, the investment had earned $200 in interest.

Sufficient: interest earned in one month

= $200 Principal∗(0.5/100)

=200

Principal amount = $40000.

Hence sufficient.

Statement II is sufficient: As of July 1 of last year, the investment had earned $401 in interest.

Sufficient: interest earned in two months = $401

Principal∗(1+0.5/100)∗(0.5/100)=401

We can solve this equation to find out the principal amount. Hence sufficient.


Pin It on Pinterest