BREAKING: Target Test Prep releases Brand New 2026 On Demand GMAT prep course

Redeem
TTP OnDemand GMAT Video Course
Featured Course

Target Test Prep GMAT OnDemand

Scott Woodbury-Stewart’s private virtual classroom — 400 hours of master-class video lessons for the GMAT Focus Edition.

  • 715+ score guarantee — highest in the industry (99th percentile)
  • 52 chapters · 1,500+ lessons · 4,000+ practice questions
  • 400 hours of video · 1,500+ instructor-led HD smartboard lessons
  • 300,000+ students accepted to Harvard, Stanford, Wharton, Booth & Sloan & more
  • 24/7 live support + weekly Zoom office hours with GMAT instructors
  • TTP AI Assist — 24/7 AI-powered virtual tutor for instant help
  • 1,200+ flashcards + AI-powered study assistant & daily calendar
  • OnDemand, LiveTeach & GMAT Bootcamp formats available
  • Also: GRE, SAT Math & Executive Assessment courses
  • MBA Admissions Consulting now available
  • 🏆 2025 EdTech Breakthrough Award: Test Prep Solution Provider of the Year
  • 200,000+ students served
  • 5-day free trial — $0 to start, no auto-billing, cancel anytime
★★★★★ 5.0 (559 reviews)
130-pt guarantee
$0 to start then $127/mo
Start Free 5-Day Trial Read 559 Reviews →

Simple Interest

Expert replies
Post new topic Post Reply
Previous Topic Next Topic
Legendary Member
Posts: 1578
Joined: Sun Dec 28, 2008 1:49 amFollowed by: 9 members
Thanked: 82 times
GMAT Score:720
by maihuna » Wed Apr 29, 2009 7:03 am
A sum of $10 is lent to be returned in 11 monthly installments of $1 each, interest being simple. The rate of interest is:

100/11 %
10 %
11 %
230/11 %
240/11%
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Source: — Problem Solving |
Master | Next Rank: 500 Posts
Posts: 418
Joined: Wed Jun 11, 2008 5:29 am
Thanked: 65 times

by bluementor » Wed Apr 29, 2009 7:56 am
I'm not sure if I've missed a trick or wrongly interpreted the question, but I think its quite straight forward.

Principal = $10
Interest earned = $11 - $10 = $1

Interest rate over the lending period = 1/10 = 10%.

Choose B.

-BM-
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Legendary Member
Posts: 1578
Joined: Sun Dec 28, 2008 1:49 amFollowed by: 9 members
Thanked: 82 times
GMAT Score:720

by maihuna » Wed Apr 29, 2009 9:46 am
bluementor wrote:I'm not sure if I've missed a trick or wrongly interpreted the question, but I think its quite straight forward.

Principal = $10
Interest earned = $11 - $10 = $1

Interest rate over the lending period = 1/10 = 10%.

Choose B.

-BM-
You have 500% missed the question met? Think? Read? Re-read? $10 is returned $1 a month for 11 month. The $1 paid in month 1 is for 10 month the one for 11th none?

Do let me know if u still miss it. its a very tricky question...
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
User avatar
Master | Next Rank: 500 Posts
Posts: 435
Joined: Sat Sep 27, 2008 2:02 pmFollowed by: 1 member
Location: San Jose, CA
Thanked: 43 times
GMAT Score:720

by dumb.doofus » Wed Apr 29, 2009 1:01 pm
Not that tricky too :-) anyways here's the solution in my opinion

simple interest = PRT where P = Principal = $10, R = Rate, T =number of periods = 11/12 year

1 = 10*11*R/(100*12)

R = 120/11

= 10.9% or 11% (round up)
One love, one blood, one life. You got to do what you should.
https://dreambigdreamhigh.blocked/
https://gmattoughies.blocked/
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Junior | Next Rank: 30 Posts
Posts: 20
Joined: Mon Apr 27, 2009 6:15 pm
Thanked: 1 times
GMAT Score:650

by keizer Soze » Wed Apr 29, 2009 3:58 pm
Hi
doofus, why do you assume that the period of the rate is one year (12 month)?

You would be alright if the question asked the "12 month rate" ... but in this case i´m not sure, correct me if i´m wrong.
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Master | Next Rank: 500 Posts
Posts: 260
Joined: Sun Oct 12, 2008 8:10 pm
Thanked: 4 times

by PAB2706 » Wed Apr 29, 2009 10:27 pm
wht is the OA?

I solved similar to dumbdoofus and got 120/11 or approx 11% as the answer.

pls post the OA
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
User avatar
Master | Next Rank: 500 Posts
Posts: 435
Joined: Sat Sep 27, 2008 2:02 pmFollowed by: 1 member
Location: San Jose, CA
Thanked: 43 times
GMAT Score:720

by dumb.doofus » Thu Apr 30, 2009 12:30 am
keizer Soze wrote:Hi
doofus, why do you assume that the period of the rate is one year (12 month)?

You would be alright if the question asked the "12 month rate" ... but in this case i´m not sure, correct me if i´m wrong.
when the period is not mentioned for the interest rate then it is taken as for a year.. if it was monthly or even bimonthly, then it would be explicitly mentioned as interest rate is 5% per 30 days or 5% per 60 days..

so anytime, just the interest rate is given, please take it for one year.

Now lets assume that the interest rate is monthly for just the sake of clarifying your doubt..
then I have
1 = 10.r.11/100 or an interest rate of 10/11 = 0.91% which is none of the answer choices.

Hope this makes it clear..
One love, one blood, one life. You got to do what you should.
https://dreambigdreamhigh.blocked/
https://gmattoughies.blocked/
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Junior | Next Rank: 30 Posts
Posts: 20
Joined: Mon Apr 27, 2009 6:15 pm
Thanked: 1 times
GMAT Score:650

by keizer Soze » Thu Apr 30, 2009 5:01 am
Ok doofus, it´s good to know that!

The last one: can I round up a number when I have other solutions that are not integers?
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Legendary Member
Posts: 1578
Joined: Sun Dec 28, 2008 1:49 amFollowed by: 9 members
Thanked: 82 times
GMAT Score:720

by maihuna » Thu Apr 30, 2009 6:00 am
OK OA is E

Here is the way to solve it:

SI = Simple Interest

$10 + SI on $10 for 11 months=$ 11 + SI of $1 for(1+2+3+4+..+10) months
10 + SI on $10 for 11 months= 11 + SI of $1 for 55 months
10 + SI on $1 for 10*11 months= 11 + SI on $1 for 55 months

SI on $1 for 55 months = 1

Rate = 100*12/(1*55) = E
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Master | Next Rank: 500 Posts
Posts: 322
Joined: Fri Mar 27, 2009 3:56 pm
Thanked: 24 times
GMAT Score:710

by mike22629 » Thu Apr 30, 2009 8:30 am
Simple Interest Formula

Principal*Rate*T = Interest Paid

T= number of years

P = 10
T = 11/12
Interest Paid = 1

10*r*(11/12) = 1

r = 12/110

Approximately 11 ( you have to round up)

I dont think the GMAT would usually force you to make an assumption to round up like this, unless it explicity tells you to.
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
User avatar
Master | Next Rank: 500 Posts
Posts: 229
Joined: Tue Jan 13, 2009 6:56 am
Thanked: 8 times
GMAT Score:700

by Uri » Thu Apr 30, 2009 12:45 pm
maihuna wrote:OK OA is E

Here is the way to solve it:

SI = Simple Interest

$10 + SI on $10 for 11 months=$ 11 + SI of $1 for(1+2+3+4+..+10) months
10 + SI on $10 for 11 months= 11 + SI of $1 for 55 months
10 + SI on $1 for 10*11 months= 11 + SI on $1 for 55 months

SI on $1 for 55 months = 1

Rate = 100*12/(1*55) = E
maihuna, i've seen this problem somewhere long back and am sure that your method is correct. but i can not understand the logic. could you please explain a little bit?
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
User avatar
Master | Next Rank: 500 Posts
Posts: 435
Joined: Sat Sep 27, 2008 2:02 pmFollowed by: 1 member
Location: San Jose, CA
Thanked: 43 times
GMAT Score:720

by dumb.doofus » Thu Apr 30, 2009 3:16 pm
maihuna wrote:OK OA is E

Here is the way to solve it:

SI = Simple Interest

$10 + SI on $10 for 11 months=$ 11 + SI of $1 for(1+2+3+4+..+10) months
10 + SI on $10 for 11 months= 11 + SI of $1 for 55 months
10 + SI on $1 for 10*11 months= 11 + SI on $1 for 55 months

SI on $1 for 55 months = 1

Rate = 100*12/(1*55) = E
I am sorry buddy.. just can't get it.. please elaborate in simpler terms so that everyone benefits..
One love, one blood, one life. You got to do what you should.
https://dreambigdreamhigh.blocked/
https://gmattoughies.blocked/
Top
Join the discussion
Log in to postLogin with Googleuse password
QUOTE IN REPLY
Post new topic Post Reply
• Page 1 of 1