Question

A loan company dropped the interest rate it charges on second mortgages from 8.7% to 7.3%. What percent reduction did this represent?

Answer 1

The percent reduction in interest rate is 16.09%.

Step-by-step explanation:

To calculate the percent reduction in interest rate, you subtract the new rate from the original rate, divide the result by the original rate, and then multiply by 100 to get a percentage. In this case, the original rate is 8.7% and the new rate is 7.3%.

To calculate the percent reduction:

Percent Reduction = ((8.7 - 7.3) / 8.7) * 100 = 16.09%

Therefore, the interest rate reduction represents a 16.09% reduction.