The annual interest rate earned by an investment increased : PS Archive
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# The annual interest rate earned by an investment increased

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Manager
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The annual interest rate earned by an investment increased [#permalink]

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16 Sep 2006, 15:44
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The annual interest rate earned by an investment increased by 10 percent from last year to this year. If the annual interest rate earned by the investment this year was 1%, what was the annual interest rate last year?

A. 10%
B. 111%
C. 91%
D. 100%
E. 108%
Manager
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17 Sep 2006, 04:33
lan583 wrote:
The annual interest rate earned by an investment increased by 10 percent from last year to this year. If the annual interest rate earned by the investment this year was 1%, what was the annual interest rate last year?

A. 10%
B. 111%
C. 91%
D. 100%
E. 108%

If increasing x by 10% gives 1%, then
1.1x = 1% x = 1/1.1% = 10/11 ~ 0.91%

C looks closest - by a factor of 100...
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Manager
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20 Sep 2006, 11:38
What is the right answer to this?

I get 0.909% which is not anywhere close to any of the options!!
Director
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20 Sep 2006, 20:23
I don't get it either.
Let last year's interest rate be X.
It was increased by 10%, so this years interest rate = 110X/100
But, we know this year's APR = 1%
110X/100 = 1/100
X = 1/110
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25 Sep 2006, 21:42
lan583 wrote:
The annual interest rate earned by an investment increased by 10 percent from last year to this year. If the annual interest rate earned by the investment this year was 1%, what was the annual interest rate last year?

A. 10%
B. 111%
C. 91%
D. 100%
E. 108%

It says the annual interest rate this year is 1% which is an increase by 10% over last year's. So the interest rate last year should have been less than 1%.

OA and if possible OE please?
Unless we are reading the question wrong, I don;t see how this can be right.
Re: PS-interest   [#permalink] 25 Sep 2006, 21:42
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