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Juliana has three options to invest her money for one year.
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13 Aug 2020, 02:02
13 Aug 2020, 02:02
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Question Stats:
42% (01:39) correct
57% (02:01) wrong based on 75 sessions
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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
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
Re: Juliana has three options to invest her money for one year.
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28 Sep 2020, 02:53
28 Sep 2020, 02:53
Expert Reply
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
Question From Our New Project: GRE Quant Challenge Questions Daily - NEW EDITION!
For more theory and practice see our GRE - Math Book
Re: Juliana has three options to invest her money for one year.
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28 Sep 2020, 04:01
28 Sep 2020, 04:01
2
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 %
Answer : C
Cheers
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 %
Answer : C
Cheers
