It is currently 19 Sep 2019, 07:21

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Bob invested one half of his savings

Author Message
TAGS:
Intern
Joined: 20 May 2019
Posts: 31
Followers: 0

Kudos [?]: 2 [0], given: 0

Bob invested one half of his savings [#permalink]  08 Jun 2019, 05:11
00:00

Question Stats:

100% (03:42) correct 0% (00:00) wrong based on 1 sessions
Bob invested one half of his savings in a bond that paid simple interest for 2 years and received \$550 as interest. He invested the remaining in a bond that paid compound interest (compounded annually) for the same 2 years at the same rate of interest and received \$605 as interest. What was the annual rate of interest?

(A) 5%
(B) 10%
(C) 12%
(D) 15%
(E) 20%
[Reveal] Spoiler: OA
Manager
Joined: 08 Dec 2018
Posts: 94
Followers: 0

Kudos [?]: 34 [1] , given: 30

Re: Bob invested one half of his savings [#permalink]  09 Jun 2019, 08:07
1
KUDOS
From the given info,
Simple as well as compound interest ( as compounded annually) for the first year will be 550/2= 275.
in the Second year, this interest i.e. 275 generated ( compound interest) the additional interest i.e. 605-(275+275)=55
No, interest 55is generated by 275 in one year is ONLY at 20% rate ( i.e. (55/275)*100).
20%
Re: Bob invested one half of his savings   [#permalink] 09 Jun 2019, 08:07
Display posts from previous: Sort by