GMAT Exam > GMAT Questions > What will be the value of $1000 at the end of...
Start Learning for Free
What will be the value of $1000 at the end of 3 years?
(1) The return for the investment is 10% p.a., compounded annually.
(2) The amount at the end of the first year is $1100.
- a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.
- b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.
- c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.
- d)EACH statement ALONE is sufficient.
- e)Statements (1) and (2) TOGETHER are NOT sufficient.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
What will be the value of $1000 at the end of 3 years?(1) The return f...
In order to find the value of $1000 at the end of 3 years, we need the rates of return for each of the three years.
Let the rate of return for the first year be r1 %
So, the amount at the end of the first year, A1 = 1000 + r1 % of 1000
Let the rate of return for the second year be r2 %
So, the amount at the end of the second year, A2 = A1 + r2 % of A1
Let the rate of return for the third year be r3 %
We can similarly prove that the amount at the end of the third year,
Thus, in order to find the amount at the end of the third year, we need to know the values of r1, r2 and r3
Step 3: Analyze statement 1
Statement 1 says that:
The annual rate of return for the investment is 10%
This statement implies that the rate of return for each of the three years is 10%
Putting r1 = r2 = r3 = 10 in Equation 1:
Thus, using Statement 1, we are able to find a unique value for
So, Statement 1 is sufficient
Step 4: Analyze Statement 2
Statement 2 states that
The amount at the end of the first year is $1100
From this statement, we do not know if the interest offered was CI or SI. Also, if it was CI, we do not know the compounding frequency.
Thus, Statement 2 is not sufficient.
Step 5: Analyze Both Statements Together (if needed)
This step is not needed as we do get a unique answer in Step 3
So, the correct answer is Option A.
Most Upvoted Answer
What will be the value of $1000 at the end of 3 years?(1) The return f...
Understanding the Question
To determine the future value of an investment of $1000 after 3 years, we analyze two statements provided:
Statement (1): The return for the investment is 10% p.a., compounded annually.
- This statement gives us a clear interest rate.
- Using the formula for compound interest: A = P(1 + r)^n, where:
- A is the amount after n years,
- P is the principal (initial amount),
- r is the annual interest rate,
- n is the number of years.
- Substituting our values:
- P = 1000,
- r = 0.10,
- n = 3.
- Calculation: A = 1000(1 + 0.10)^3 = 1000(1.331) = 1331.
- Thus, Statement (1) alone is sufficient.
Statement (2): The amount at the end of the first year is $1100.
- This indicates that the return on the investment for the first year is $100 (which corresponds to an interest rate of 10%).
- However, it does not provide information on the return for the subsequent years.
- Without knowing if the same rate applies for years 2 and 3, we cannot determine the final amount after 3 years.
- Therefore, Statement (2) alone is insufficient.
Conclusion
- Statement (1) alone is sufficient to calculate the future value.
- Statement (2) alone does not provide enough information.
Thus, the correct answer is option 'A': Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.
To determine the future value of an investment of $1000 after 3 years, we analyze two statements provided:
Statement (1): The return for the investment is 10% p.a., compounded annually.
- This statement gives us a clear interest rate.
- Using the formula for compound interest: A = P(1 + r)^n, where:
- A is the amount after n years,
- P is the principal (initial amount),
- r is the annual interest rate,
- n is the number of years.
- Substituting our values:
- P = 1000,
- r = 0.10,
- n = 3.
- Calculation: A = 1000(1 + 0.10)^3 = 1000(1.331) = 1331.
- Thus, Statement (1) alone is sufficient.
Statement (2): The amount at the end of the first year is $1100.
- This indicates that the return on the investment for the first year is $100 (which corresponds to an interest rate of 10%).
- However, it does not provide information on the return for the subsequent years.
- Without knowing if the same rate applies for years 2 and 3, we cannot determine the final amount after 3 years.
- Therefore, Statement (2) alone is insufficient.
Conclusion
- Statement (1) alone is sufficient to calculate the future value.
- Statement (2) alone does not provide enough information.
Thus, the correct answer is option 'A': Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.
|
Explore Courses for GMAT exam
|
|
Top Courses for GMATView all
Question Description
What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? for GMAT 2025 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer?.
What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? for GMAT 2025 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer?.
Solutions for What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for GMAT.
Download more important topics, notes, lectures and mock test series for GMAT Exam by signing up for free.
Here you can find the meaning of What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice What will be the value of $1000 at the end of 3 years?(1) The return for the investment is 10% p.a., compounded annually.(2) The amount at the end of the first year is $1100.a)Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.b)Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.c)BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.d)EACH statement ALONE is sufficient.e)Statements (1) and (2) TOGETHER are NOT sufficient.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice GMAT tests.
|
|
Explore Courses for GMAT exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup