It is currently 27 Oct 2020, 03:51

### 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

# Juliana has three options to invest her money for one year.

Author Message
TAGS:
Founder
Joined: 18 Apr 2015
Posts: 13693
GRE 1: Q160 V160
Followers: 305

Kudos [?]: 3542 [0], given: 12654

Juliana has three options to invest her money for one year. [#permalink]  13 Aug 2020, 02:02
Expert's post
00:00

Question Stats:

50% (01:39) correct 50% (01:42) wrong based on 22 sessions
Juliana has three options to invest her money for one year. Option A is discounted notes that she can buy for \$ 98 and cash in for a face value of \$ 100 a year later. Option B is a savings account that pays a 2% annual interest rate compounded semi-annually. Option C is an account that pays 2.03% simple interest for one year. Which of the answer choices represents the percent returns from the three choices in order from lowest to highest?

A) A, B, C

B) A, C, B

C) B, C, A

D) C, A, B

E) C, B, A

KUDOS for the right solution and explanation
[Reveal] Spoiler: OA

_________________

- Do you want all the GRE Prep Club resources at a glance (sort of ) ?? Look at GRE Prep Club Official LinkTree page
- Do you want all the GRE Prep Club FREE resources in one spot ?? Look at Free GRE Materials - Where to get it!! (2020)
- Do you want all the FREE GRE tests on earth ?? Look at FREE GRE Practice Tests [Collection] - New Edition (2021)
- Do you want to know the GRE score in the Top 25 BS in 7 continents ?? Look at here The GRE average score at Top 25 Business Schools 2020 Ed.
- Need Practice 20 Free GRE Quant Tests available for free with 20 Kudos
- GRE Prep Club Members of the Month: Each member of the month will get three months free access of GRE Prep Club tests.

Founder
Joined: 18 Apr 2015
Posts: 13693
GRE 1: Q160 V160
Followers: 305

Kudos [?]: 3542 [0], given: 12654

Re: Juliana has three options to invest her money for one year. [#permalink]  28 Sep 2020, 02:53
Expert's post
Post A Detailed Correct Solution For The Above Questions And Get A Kudos.
Question From Our New Project: GRE Quant Challenge Questions Daily - NEW EDITION!

For more theory and practice see our GRE - Math Book
_________________

- Do you want all the GRE Prep Club resources at a glance (sort of ) ?? Look at GRE Prep Club Official LinkTree page
- Do you want all the GRE Prep Club FREE resources in one spot ?? Look at Free GRE Materials - Where to get it!! (2020)
- Do you want all the FREE GRE tests on earth ?? Look at FREE GRE Practice Tests [Collection] - New Edition (2021)
- Do you want to know the GRE score in the Top 25 BS in 7 continents ?? Look at here The GRE average score at Top 25 Business Schools 2020 Ed.
- Need Practice 20 Free GRE Quant Tests available for free with 20 Kudos
- GRE Prep Club Members of the Month: Each member of the month will get three months free access of GRE Prep Club tests.

Intern
Joined: 15 Aug 2020
Posts: 14
Followers: 0

Kudos [?]: 8 [1] , given: 12

Re: Juliana has three options to invest her money for one year. [#permalink]  28 Sep 2020, 04:01
1
KUDOS
This is my approach:

Option A:

Discounted notes buy price = \$98
Discounted notes sell price = \$100

%Return = (2*100)/98 = 2.04 %

Option B:

Savings account pays a 2% annual rate compounded semi-annually

We can write A =P(1+ r/n)^nt

Here,

A= final amount
P= Principal
r = compound interest rate(fraction)
n = number of times interest is compounded annually
t = number of years

plug in the values:

A = 100(1 + .02/2)^2*1

Solving

A = 102.01

So %Return = 2.01%

Option C:

2.03% simple interest

So %Return = 2.03 %

Cheers
Manager
Joined: 08 Aug 2020
Posts: 86
Followers: 1

Kudos [?]: 73 [1] , given: 7

Re: Juliana has three options to invest her money for one year. [#permalink]  30 Sep 2020, 05:28
1
KUDOS
So I pick \$98 as principal(clue from the question)
Option A:- Returns \$2
Option B returns 98(1+2/200)^2 = 1.98

Option C returns 98*2.03/100 = 1.98

Hence BCA = C

Posted from my mobile device
Re: Juliana has three options to invest her money for one year.   [#permalink] 30 Sep 2020, 05:28
Display posts from previous: Sort by