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Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below. 
Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.
Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.
  • a)
    3
  • b)
    30
  • c)
    160
  • d)
    80
  • e)
    100
Correct answer is option 'A,C'. Can you explain this answer?
Verified Answer
Directions: Read the information presented in Two-Part Analysis Questi...
Question 5 Explanation: The answer is 160 and 3. Customer 1 deposits $100 initially into the new account. If the amount P is invested at an annual interest rate of r percent, compounded n times per year, then the value V of the investment at the end of t years is given by the formula:

So after two years, the investment will be worth $146.41. That amount is then compounded annually for two more years at the adjusted rate of 5%. This formula becomes V = 146.41(1 + .05)2. This becomes V = 161.42. Customer 1’s investment is worth approximately $161 after four years, which is closest to 160 in the table.
Customer 2 had an equal amount after two years, so he/she would also have $146.41. Then the interest is compounded quarterly for the next two years at 6%. The formula for this would look like:

That is a difference of 164.93 – 161.42 = 3.51, which is closest to 3.
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Most Upvoted Answer
Directions: Read the information presented in Two-Part Analysis Questi...
Question 5 Explanation: The answer is 160 and 3. Customer 1 deposits $100 initially into the new account. If the amount P is invested at an annual interest rate of r percent, compounded n times per year, then the value V of the investment at the end of t years is given by the formula:

So after two years, the investment will be worth $146.41. That amount is then compounded annually for two more years at the adjusted rate of 5%. This formula becomes V = 146.41(1 + .05)2. This becomes V = 161.42. Customer 1’s investment is worth approximately $161 after four years, which is closest to 160 in the table.
Customer 2 had an equal amount after two years, so he/she would also have $146.41. Then the interest is compounded quarterly for the next two years at 6%. The formula for this would look like:

That is a difference of 164.93 – 161.42 = 3.51, which is closest to 3.
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Directions: Read the information presented in Two-Part Analysis Questi...
Investment Details for Clearwater State Bank
- Initial Deposit: $100
- Interest Rate (Years 1-2): 20% compounded semi-annually
- Interest Rate (Years 3-4): 5% compounded annually
Calculating Total After 2 Years
1. Compounding Semi-Annually for the First Two Years:
- After 6 months: $100 * (1 + 0.20/2) = $100 * 1.10 = $110
- After 1 year: $110 * (1 + 0.20/2) = $110 * 1.10 = $121
- After 1.5 years: $121 * (1 + 0.20/2) = $121 * 1.10 = $133.10
- After 2 years: $133.10 * (1 + 0.20/2) = $133.10 * 1.10 ≈ $146.41
Calculating Total After 4 Years
2. Compounding Annually for Years 3 and 4:
- Year 3: $146.41 * (1 + 0.05) = $146.41 * 1.05 ≈ $154.73
- Year 4: $154.73 * (1 + 0.05) = $154.73 * 1.05 ≈ $162.46
Final Value of Customer 1's Investment
- Total After 4 Years: Approximately $162.46
Investment Details for Clearwater Credit Union
- Unknown Initial Deposit: Denote it as X
- Interest Rate (Year 1): 15% compounded quarterly
- Interest Rate (Years 2-4): 6% compounded quarterly
Calculating Total After 4 Years for Customer 2
1. Year 1: X * (1 + 0.15/4)^4 = X * (1.0375)^4 ≈ X * 1.1555
2. Year 2: (X * 1.1555) * (1 + 0.06/4)^4 = (X * 1.1555) * (1.015)^4 ≈ (X * 1.1555) * 1.06136 ≈ X * 1.2284
3. Year 3: (X * 1.2284) * (1 + 0.06/4)^4 ≈ X * 1.2284 * 1.06136 ≈ X * 1.3056
4. Year 4: (X * 1.3056) * (1 + 0.06/4)^4 ≈ X * 1.3056 * 1.06136 ≈ X * 1.3871
Equal Investment Condition
- After two years, both customers had equal investments, leading to the comparison:
- $146.41 = X * 1.2284
- Solving gives: X ≈ 119.10
Difference in
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Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer?
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Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer?.
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From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer?, a detailed solution for Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer? has been provided alongside types of Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Directions: Read the information presented in Two-Part Analysis Question below and then select two answers from the choices below.Clearwater State Bank is offering an introductory 20% interest rate on a new account, which will compound semi-annually for the first two years, then compound 5% annually thereafter. Customer 1 deposits $100 in that account to start. To compete, Clearwater Credit Union is offering a similar offer. Their newest account offers an introductory rate of 15% compounded quarterly for the first year, and a rate of 6% compounded quarterly thereafter. Customer 2 deposits an unknown amount with Clearwater Credit Union. After two years, the customers had an equal amount saved.Q. From the choices below, identify the closest approximate amount the first customer’s investment was worth after four years, and the difference in value of each customer’s investment after four years. Make two selections.a)3b)30c)160d)80e)100Correct answer is option 'A,C'. Can you explain this answer? tests, examples and also practice GMAT tests.
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