DATA SUFFICIENCY about the problem or restrictions that people

• Know the Data Sufficiency answer choices & miss in the problem.
the Decision Tree elimination approach In a What Is the Value? question the following
• Understand the two types of Data Sufficiency mistakes are most common:
questions: Yes/No and What is the Value 1. People assume that values must be integers
• Understand what constitutes “sufficiency” and and/or positive. With that assumption(s), a
how thin that line can be statement appears to be sufficient when there
are actually multiple values possible.
QUESTION STEM 2. People miss restrictions in the problem that
By what percent was the price of a certain do guarantee that the numbers involved are, for
candy bar increased? instance, integers, so they think there are
multiple possibilities, when indeed that
STATEMENTS statement proves one exact value.
(1) The price of the candy bar was increased by
5 cents. Questions:
(2) The price of the candy bar after the increase 7. A nursery has 30 trees, carrying only pines,
was 45 cents. oaks, and maples. How many oaks does the
ANSWER CHOICES nursery have? (1) The ratio of pines to maples is
(A) Statement (1) ALONE is sufficient, but 14:9.
statement (2) alone is not sufficient. (2) The ratio of pines to oaks is 2:1.
(B) Statement (2) ALONE is sufficient, but
statement (1) alone is not sufficient. 8. What is the value of m + n?
(C) BOTH statements TOGETHER are sufficient, (1) jm + kn + nj + km = 36
but NEITHER statement ALONE is sufficient. (2) j + k = 12
(D) EACH statement ALONE is sufficient.
(E) Statements (1) and (2) TOGETHER are NOT 9. For isosceles triangle LMN, what is the
sufficient. measure of angle N?
(1) The lengths of all three sides of triangle LMN
The Two Types of Data Sufficiency Questions are the same.
• Yes or No (2) Angle L measures 60 degrees.
• What Is the Value? 10. a, b, c, and d are consecutive integers such
For Yes or No questions, two common traps that the product abcd = 5,040. What is the
exist that tend to work against novice test- value of d?
takers. (1) d is prime
1. A statement allows for multiple values, but all (2) a > b > c > d
values provide the same answer to the Yes or
No question.
2. The statement only allows you to obtain the
answer of no—but since always no is a
consistent answer, that means that the
statement is sufficient (even though the answer
is not yes.) Remember: You are not trying to
prove that the answer is yes—only that it is
either yes or no, and not both.

Is x > 5?
(1) X^2 = 16

Is x greater than 5?
(1) 2x – 15 = 17(x – 15) + 171

For What Is the Value? questions, most of the

pitfalls relate to assumptions that people make
 I = 2,000 x 0.05 x 3 Substitute. Use 0.05 for
5%.
LEARN: TO COMPUTE SIMPLE INTEREST I = 300 Solve for I.

VOCABULARIES Check It Out: Example 1 Continued

•Interest Elaine will pay $300 in interest.
• Simple Interest You can find the total amount A to be repaid on
• Principal or Maturity Value a loan by adding the principal P to the interest I.
•Rate of Interest P+I=A principal + interest = amount
2000 + 300 = A Substitute.
When you borrow money from a bank, 2300 = A Solve for A.
you pay interest for the use of the bank’s Elaine will repay a total of $2300 on her loan.
money. When you deposit money into a savings
account, you are paid interest. Simple interest is Additional Example 2: Determining the
one type of fee paid for the use of money. Amount of Investment Time
I=Pxrxt Nancy invested $6000 in a bond at a yearly rate
I = Simple Interest of 3%. She earned $450 in interest. How long
P = Principal is the amount of money was the money invested?
borrowed or invested I=Pxrxt Use the formula.
R = Rate of interest is the percent 450 = 6,000 x0.03 x t Substitute values into
charged or earned the 450 = 180t equation.
T = Time that the money is borrowed or 2.5 = t Solve for t
invested (in years) The money was invested for 2.5 years, or 2
years and 6 months.
Additional Example 1: Finding Interest and
Total Payment on a Loan Check It Out: Example 2
To buy a car, Jessica borrowed $15,000 TJ invested $4000 in a bond at a yearly rate of
for 3 years at an annual simple interest rate of 2%. He earned $200 in interest. How long was
9%. How much interest will she pay if she pays the money invested?
the entire loan off at the end of the third year? I=Pxrxt Use the formula.
What is the total amount that she will repay? 200 = 4,000 x 0.02 x t Substitute values into
First, find the interest she will pay. the 200 = 80t equation.
I=Pxrxt Use the formula. 2.5 = t Solve for t.
I = 15,000 x 0.09 x 3 Substitute. Use 0.09 for The money was invested for 2.5 years, or 2
9%. I = 4050 Solve for I. years and 6 months.

Jessica will pay $4050 in interest. Additional Example 3:

You can find the total amount A to be repaid on Computing Total Savings John’s parents
a loan by adding the principal P to the interest I. deposited $1000 into a savings account as a
P+I=A principal + interest = amount college fund when he was born. How much will
15,000 + 4050 = A Substitute. John have in this account after 18 years at a
19,050 = A Solve for A. yearly simple interest rate of 3.25%?
Jessica will repay a total of $19,050 on her loan. I=Pxrxt Use the formula.
I = 1000 x 0.0325 x 18 Substitute. Use 0.0325
Check It Out: Example 1 for
To buy a laptop computer, Elaine borrowed 3.25%.
$2,000 for 3 years at an annual simple interest I = 585 Solve for I.
rate of 5%. How much interest will she pay if Now you can find the total.
she pays the entire loan off at the end of the Additional Example 3 Continued
third year? What is the total amount that she P+I=A Use the formula.
will repay? 1000 + 585 = A Substitute.
First, find the interest she will pay. 1585 = A Solve for A.
I=Pxrxt Use the formula. John will have $1585 in the account after 18
years.
 both sides.
He paid $11,000 in interest. Use the amount of
interest to find the interest rate.

Check It Out: Example 3

Bertha deposited $1000 into a retirement
account when she was 18. How much will Check It Out: Example 4 Continued
Bertha have in this account after 50 years at a I=Pxrxt Use the formula.
yearly simple interest rate of 7.5%? 11,000 = 9000 x r x 10 Substitute.
11,000 = 90,000 x r Simplify.
I=Pxrxt Use the formula. 11,000/90,000 = r Divide both sides by
I = 1000 x 0.075 x 50 Substitute. Use 0.075 for 90,000. 0.12 = r
7.5%. Mr. Mogi borrowed the money at an annual
I = 3750 Solve for I. rate of about 12.2%.
Now you can find the total.
Check It Out: Example 3 Continued TRY THIS!
P+I=A Use the formula. 1. A bank is offering 2.5% simple interest on a
1000 + 3750 = A Substitute. savings account. If you deposit $5000, how
4750 = A Solve for A. much interest will you earn in one year? $125
Bertha will have $4750 in the account after 50 2. Joshua borrowed $1000 from his friend and
years. paid him back $1050 in six months. What simple
annual interest did Joshua pay his friend? 10%
Additional Example 4: Finding the Rate of 3. The Hemmings borrowed $3000 for home
Interest improvements. They repaid the loan and $600
Mr. Johnson borrowed $8000 for 4 years to in simple interest four years later. What simple
make home improvements. If he repaid a total annual interest rate did they pay? 5%
of $10,320, at what interest rate did he borrow 4. Mr. Berry had $120,000 in a retirement
the money? account. The account paid 4.25% simple
P+I=A Use the formula. interest. How much money was in the account
8000 + I = 10,320 Substitute. at the end of 10 years? $171,000
I = 10,320 – 8000 = 232 Subtract 8000 from
both
sides.
He paid $2320 in interest. Use the amount of
interest to find the interest rate.
Additional Example 4 Continued
I=Pxrxt Use the formula.
2320 = 8000 x r x 4 Substitute.
2320 = 32,000 x r Simplify.
2320/32,000 = r Divide both sides by
32,000.
0.0725 = r
Mr. Johnson borrowed the money at an annual
rate of 7.25%, or 7 1/4 %.

Check It Out: Example 4

Mr. Mogi borrowed $9000 for 10 years to make
home improvements. If he repaid a total of
$20,000 at what interest rate did he borrow the
money?
P+I=A Use the formula.
9000 + I = 20,000 Substitute.
I = 20,000 – 9000 = 11,000 Subtract 9000 from
 EXERCISES:
• A promissory note dated 23 October 2015
reads Seven months from date, I promise to pay
Php 4000 with interest at 6% per annum’. Find
(i) the maturity date
(ii) the maturity value
• The maturity value for 90 days promissory
note is Php 450 that bears interest at 8% per
annum. What is the face value for this interest
Promissory Notes bearing note?

Type of Promissory Notes

Promissory notes can be of two types:
Interest Bearing Note
 The rate of interest is stated on the
note and is usually simple interest rate
Non-Interest Bearing Note
 The rate of interest is not stated on the
note. Bank Discount & Discounting Notes
What is bank discount?
EXAMPLE OFAN INTEREST BEARING NOTE: • The interest charge from a bank for a short
term loans.
• Bank discount computed based on the
maturity value (final amount)
What is discounting notes?
• Selling the notesto the bank before its
maturity date
Why discounting notes?
• The holder needs a cash before its maturity
date

MATURITY VALUE FORMULA BANK DISCOUNT

What is maturity value? D = Sdt
• The total sum of money which the payee will where
receive on the maturity date S: the simple amount/maturity value
Formula Maturity Value: d: discount rate (%)
Interest bearing notes: t: term of discount in years
Maturity value, S = Face value + Interest
=P+I PROCEED
= P + Prt If the note was discounted:
= P (1+rt) • the date of the note is discounting date
Non-Interest bearing notes: • the amount received on the date of
Maturity value, S = Face value discounting is called the proceeds.
=P • The terms of discountstarting from the note
EXAMPLE: was discounted until the maturity date.
Peter has notes and have a face value of Php Proceeds = Maturity Value – Bank Discount
5000 for 60 days. The note has a simple interest =S–D
rate of 8% What is the maturity value for the = S – Sdt
note? = S(1-dt)
SOLUTION:
S1=P(1+rt)
=5000 [1+0.08 (60/360)]
=5066.67 (interest bearing note)
 SOLUTION:

EXAMPLE: Exercise:
On 2 April 2016, Karding borrowed an amount What discount rate should a lender charge to
of Php 8000 at 2% interest rate for three earn an interest rate of 20% on a 9 months
months. The discount rate charged by the loan?
lender is 10%. Find the bank discount if the note
was discounted on 2 May 2012.
SOLUTION:

Agnes Abanilla was granted a loan of

P20,000 by her employer CPM Industrial
Fabricator and Construction Corporation with
EXERCISES: an interest of 6% for 180 days on the principal
If Tong will receive 4000, 30 days before its collected in advance. The corporation would
maturity date, calculate the amount of maturity accept a promissory note for P20,000 non-
value at 12% bank discount? interest for 180 days. If discounted at once, find
the proceeds of the note.

Simple Interest Equivalent to Bank Discount

An interest rate, r% and discount rate d
% are said to be equivalent if the two rates give
the same present value for an amount due in On march 30, Insyong accepted a nine
the future. Thus, month $32,250.00 promissory note at 7%
Calculate d% given that r% interest from one of his clients to pay for some
d = r/1+rt carpentry work he had completed .On April 27,
Calculate r% given that d% he sold the notes to Hammond bank at 9.5%
r = d/1-dt discount . What were his proceed?

EXAMPLE:
A note of 4000 will due in six months. A
bank discount rate of 12% is applied to this
note. Find the equivalent simple interest rate
that is charged by the bank.
 If today is your 14th birthday and you
put $100 in the bank at 4% interest and leave it
until you are 60, how much money will you
have?
A = p(1+r)^t
= 100(1.04)^46
= 607.48
Problem Solving: Compound Interests

Simple interest: I=prt What about a mutual fund that pays

I = interest 10% interest?
p = principal: amount you start with A = p(1+r)^t
r = rate of interest = 100(1.10)^46
t= time in years = 8017.95

If you invest $3,000 at 5% for one year, how $100 is invested at 10% interest
much will you make for the year? compounded yearly for 6 years
I = prt A= p(1+r/n)^nt
= 3000  0.05  1 A= 100(1+.10/1)^1x6
= 150 A= 100(1.10)^6
You made $150 for the year. A= 117.16

Compound interest formula: $250 invested at 6.5% for 8 years

compounded monthly
A= p(1+r/n)^nt
A= balance A= 250(1+.065/12)^12x8
r= rate A= 250(1.0054)^96
n= number of compounding periods A= 419.25
p= principal
t= time in years How much money would you need to
deposit today at 9% annual interest
Compounding Periods compounded monthly to have $12000 in the
Annually 1 account after 6 years?
Semi-Annually 2 1200= p(1+.09/12)^12(6)
Quarterly 4 1200= p(1.0075)^72
Bimonthly/Every 2 months 6 1200= p(1.712552707)
Monthly 12 P=7007.08
Daily 365
If you deposit $5000 into an account
Find the total amount in your account if paying 6% annual interest compounded
you start with $750 at 7.5% interest for 2.5 monthly, how long until there is $8000 in the
years. account?
= 750(1+0.075)^2.5 Formula for t: log A/P= log(1+r/n)^n(t)
= 750(1.075)^2.5 (use a calculator log 8000/5000= log(1+.06/12)^12t
here!) log 1.6= log(1.005)^12t
= $898.63 log 1.6=12t(log1.005)
log1.6/log1.005= 12t
How much should you invest at 7% to 94.23553232=12t
have $200 after 5 years? T= 7.9
A = p(1+r)^t (Plug in what you know.)
200 = p(1.07)^5 (get p alone, then use a
calculator.)
142.60= p