At what simple annual interest rate must \(\$2,500\) be invested if it is to earn \(\$225\) in interest in one year?
(A) \(6\%\)
(B) \(7\%\)
(C) \(8\%\)
(D) \(9\%\)
(E) \(10\%\)
Answer: D
Source: GMAT Prep
At what simple annual interest rate must \(\$2,500\) be invested if it is to earn \(\$225\) in interest in one year?
This topic has expert replies
GMAT/MBA Expert
- Brent@GMATPrepNow
- GMAT Instructor
- Posts: 16207
- Joined: Mon Dec 08, 2008 6:26 pm
- Location: Vancouver, BC
- Thanked: 5254 times
- Followed by:1268 members
- GMAT Score:770
Let x = the PERCENT annual interest rate
So, we want: x percent of $2,500 = 225
Rewrite as: x/100 of $2,500 = 225
In other words: (x/100)(2,500) = 225
Simplify: 2500x/100 = 225
Simplify again: 25x = 225
Solve: x = 225/25 = 9
Answer: D
Cheers,
Brent