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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by M7MBA » Fri Jan 14, 2022 9:15 am

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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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Source: Beat The GMAT — Problem Solving | Fri Jan 14, 2022 9:15 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

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

by Brent@GMATPrepNow » Sat Jan 15, 2022 7:56 am

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

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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