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Simple Interest

A family made...

Question

A family made a down payment of $75 a n d b o r r o w e d a s e t o f e n c y c l o p e d i a s t h a t c o s t$ 400. The balance with interest was paid in 23 monthly payments of $16 e a c h a n d a f i n a l p a y m e n t o f$ 9. What was the per cent of interest to the borrowed sum?

12 %

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14 %

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16 %

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18 %

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Solution

The correct option is C 16 %
Total cost = $400 D o w n p a y m e n t =$ 75
Remaining amount= $400 - 75 =$ 325 $B a l a n c e d p a i d i n 24 m o n t h s =$ 23 \times 16+9= $377$
Difference= $377 - 325 =$ 52 $T h e p e r c e n t o f i n t e r e s t t o t h e b o r r o w e d s u m =$ \frac{52}{325}\times 100=16$

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