Civil Service Exam Reviewer · Simple Interest and Profit/Loss · hard
A 1-year loan of ₱130,000 has its 20% interest deducted in advance. What is the effective (true) interest rate on the money received?
- 20%
- 30%
- 24%
- 25%
Answer
D. 25%
Solution
Proceeds = ₱104,000. Effective rate = 26,000 ÷ 104,000 = 25%.
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