Question

The interest rate on a car loan has decreased 29.3% over the last 10 years and is now 7.7%. What was the rate 10 years ago?

(Express your answer rounded correctly to the nearest tenth of a percent!)

Answer 1

We know that the interest decreased by 29.3%, therefore what was left now is simply just 70.7% of the original, therefore we divide this by 0.707

rate = 7.7% / 0.707

rate = 10.89%

So the rate was 10.89% 10 years ago