Translate the words into math.
The annual rate of income, r, was increased by two percentage points.
r + 2
When 1500 is multiplied by (r + 2)/100 the result is 90.
1500 x (r + 2)/100 = 90
15 x (r + 2) = 90
r + 2 = 6
r = 4
The correct answer is B.
Alternate Method
Try each answer choice, adding 2, dividing by 100 and multiplying by 1500, to see which generates a result of 90.
(A) 3.5 + 2 = 5.5 .055 x 1500 = 82.5
(B) 4 + 2 = 6 .06 x 1500 = 90
The correct answer is B.
Interest
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Hi sukhman,
This question can be solved by TESTing THE ANSWERS.
We're told that an invest = $1500 and that by raising the interest rate on that $1500 by 2 percentage points the interest would equal $90. We're asked for the ORIGINAL interest rate.
$1500 is a nice "round" number; 1% of $1500 = $15, so calculating any other percent of $1500 will be pretty straight-forward. Three of the answers are also nice round numbers, so let's start with....
Answer B: 4%
If the original interest was 4%, then the new interest = 4+2 = 6%
6% of $1500 = $90
This is an exact MATCH for what we were told, so this must be the answer.
Final Answer: B
GMAT assassins aren't born, they're made,
Rich
This question can be solved by TESTing THE ANSWERS.
We're told that an invest = $1500 and that by raising the interest rate on that $1500 by 2 percentage points the interest would equal $90. We're asked for the ORIGINAL interest rate.
$1500 is a nice "round" number; 1% of $1500 = $15, so calculating any other percent of $1500 will be pretty straight-forward. Three of the answers are also nice round numbers, so let's start with....
Answer B: 4%
If the original interest was 4%, then the new interest = 4+2 = 6%
6% of $1500 = $90
This is an exact MATCH for what we were told, so this must be the answer.
Final Answer: B
GMAT assassins aren't born, they're made,
Rich
