At what simple annual interest rate must $2,500 be invested

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AAPL: Moderator; Posts: 2636; Joined: Sun Oct 29, 2017 2:08 pmFollowed by: 2 members

by AAPL » Sat Oct 05, 2019 3:47 am

GMAT Prep

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%

OA D

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Source: Beat The GMAT — Problem Solving | Sat Oct 05, 2019 3:47 am

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Brent@GMATPrepNow: GMAT Instructor; Posts: 16207; Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members; Location: Vancouver, BC; Thanked: 5254 times; GMAT Score:770

by Brent@GMATPrepNow » Sat Oct 05, 2019 6:20 am

AAPL wrote:GMAT Prep

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%

OA D

Let x = the require interest rate

So, x percent of $2500 = $225
In other words: (x percent)($2500) = $225
In other words: x percent = $225/$2500
Divide top and bottom by 5 to get: x percent = 45/500
Divide top and bottom by 5 to get: x percent = 9/100
9/100 = 9%

Answer: D

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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