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# The annual interest rate on a certain savings account

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GRE Prep Club Legend
Joined: 07 Jun 2014
Posts: 4857
GRE 1: Q167 V156
WE: Business Development (Energy and Utilities)
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The annual interest rate on a certain savings account [#permalink]  02 Feb 2017, 07:41
Expert's post
00:00

Question Stats:

83% (00:38) correct 16% (00:00) wrong based on 6 sessions
The annual interest rate on a certain savings account increases from 1.25% to 1.5%. What percent increase in the annual interest rate does this change represent?
A. 0.2%
B. 0.25%
C. 0.167%
D. 20%
E. 25%

Drill 2
Question: 12
Page: 317
[Reveal] Spoiler: OA

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Sandy
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GRE Prep Club Legend
Joined: 07 Jun 2014
Posts: 4857
GRE 1: Q167 V156
WE: Business Development (Energy and Utilities)
Followers: 106

Kudos [?]: 1820 [0], given: 397

Re: The annual interest rate on a certain savings account [#permalink]  02 Feb 2017, 07:48
Expert's post
Explanation

The percent change formula is $$\frac{difference}{original} \times 100$$, so plugging the numbers from the problem into the formula yields $$\frac{0.25}{1.25} \times 100$$=$$\frac{25}{125} \times 100$$ = $$\frac{1}{5} \times 100$$ = 20. If you selected choice (E), you may have used the wrong value as the original: Remember, in a percent increase, the original number is the smaller value.

Hence option D is correct.
_________________

Sandy
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Re: The annual interest rate on a certain savings account   [#permalink] 02 Feb 2017, 07:48
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