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Bob invested one half of his savings

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Intern
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Joined: 20 May 2019
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Bob invested one half of his savings [#permalink] New post 08 Jun 2019, 05:11
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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
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Re: Bob invested one half of his savings [#permalink] New post 09 Jun 2019, 08:07
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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
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Bob invested one half of his savings

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