Loan X has a principal of $10,000x

[I_need_a_700plus]

GMAT Prep Exam: IR Section

Loan X has a principal of $10,000x and a yearly simple interest rate of 4%. Loan Y has a principal of $10,000y and yearly simple rate of 8%. Loans X and Y will be consolidated to form Loan Z with a principal of $(10,000x + 10,000y) and a yearly simple interest rate of r%, where r = (4x + 8y) / (x + y). In the table, select a value for x and a value for y corresponding to a yearly simple interest rate of 5% for the consolidate loan. Make only two selections, one in each column.

X Y Value
__ __ 21
__ __ 32
__ __ 51
__ __ 64
__ __ 81
__ __ 96

Answer: y = 32, x = 96.

Can anyone help and explain this problem? Thanks!

[RonPurewal]

They're just telling you that r = 5. So, set (4x + 8y)/(x + y) = 5, and then simplify as much as you can.

Once you've simplified that relationship, you'll have something that will make it easy to pick the requisite numbers out of the list.

[CarrollO614]

[[/b]

They're just telling you that r = 5. So, set (4x + 8y)/(x + y) = 5, and then simplify as much as you can.

Once you've simplified that relationship, you'll have something that will make it easy to pick the requisite numbers out of the list.

Can you show how the math works? I don't follow. Is the only way to do this plug and play?

[tim]

If (4x+8y)/(x+y) = 5, then we can get a ratio of x to y:

4x + 8y = 5x + 5y
3y = x

So just look for two values, one of which is three times the other.