Hi there,
I can't figure out this computing interest problem from the official GRE book. I busted out the simple interest formula, and tried putting in 10% and 8% separately to solve for the principal for each. Wishing Pat had not chosen to diversify...
~Arielle
13.) Pat invested a total of $3,000. Part of the money was invested in a money market account that paid 10 percent simple annual interest, and the remainder of the money was invested in a fund that paid 8% simple annual interest. If the interest earned at the end of the first year from these investments was $256, how much did pat invest at 10% and how much at 8%?
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- arielleburstein
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- tommywallach
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Re: OG p.244 # 13
Hey Arielle,
You have to be careful on the GRE whenever you find yourself applying a simple formula. In general, the test doesn't allow many questions to be solved simply by plugging into an equation. In this case, there's no equation that allows one to split up the principle into two chunks that receive different interest rates.
In this case, we set x to equal the amount invested at 10%. Then we can write a simple algebraic equation:
.1x + .08 * (3000 - x) = 256
And that's it! Distribute and solve!
-t
You have to be careful on the GRE whenever you find yourself applying a simple formula. In general, the test doesn't allow many questions to be solved simply by plugging into an equation. In this case, there's no equation that allows one to split up the principle into two chunks that receive different interest rates.
In this case, we set x to equal the amount invested at 10%. Then we can write a simple algebraic equation:
.1x + .08 * (3000 - x) = 256
And that's it! Distribute and solve!
-t
2 posts Page 1 of 1