Difference between revisions of "1954 AHSME Problems/Problem 33"

Latest revision as of 18:14, 8 November 2024

A bank charges $\textdollar{6}$ for a loan of $\textdollar{120}$ . The borrower receives $\textdollar{114}$ and repays the loan in $12$ easy installments of $\textdollar{10}$ a month. The interest rate is approximately:

$\textbf{(A)}\ 5 \% \qquad \textbf{(B)}\ 6 \% \qquad \textbf{(C)}\ 7 \% \qquad \textbf{(D)}\ 9\% \qquad \textbf{(E)}\ 15 \%$

Solution

1954 AHSC (Problems • Answer Key • Resources)
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 ==Solution==
-The borrower pays <math>\textdollar{120}</math> in a single year for a loan of <math>\textdollar{114}</math>. This means that the bank charges an interest of <math>\textdollar{6}</math> for a loan of <math>\textdollar{114}</math> over a single year, so that the annual interest rate is <math>100*\frac{\textdollar{6}}{\textdollar{114}} = \frac{100}{19} \approx 5</math> percentage points. Therefore, our answer is <math>\boxed{\text{(A)}}</math> and we are done.
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Difference between revisions of "1954 AHSME Problems/Problem 33"

Latest revision as of 18:14, 8 November 2024

Solution

See Also