Question

Raj deposits $20000 in a bank that pays simple interest at a rate of 2.75% per annum. If the interest rate decreases to x% per annum, he will receive $50 less every year. Find the value of x

Answer 1

Answer:

The easy way: $50 = 0.25% of 20,000

So, his interest rate was 2.75 - 0.25 = 2.5%

Or, algebraically,

20000(1.0275 - (1+x/100)) = 50

x = 2.5

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