Civil Service Exam Reviewer · Simple Interest and Profit/Loss · hard
A 1-year loan of ₱210,000 has its 8% interest deducted in advance. What is the effective (true) interest rate on the money received?
- 8%
- 12%
- 8.7%
- 7.7%
Answer
C. 8.7%
Solution
Proceeds = ₱193,200. Effective rate = 16,800 ÷ 193,200 = 8.7%.
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