At what simple annual interest rate must \(\$2,500\) be invested if it is to earn \(\$225\) in interest in one year?

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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

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M7MBA wrote:
Fri Jan 14, 2022 9:15 am
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
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

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Brent
Brent Hanneson - Creator of GMATPrepNow.com
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