Question

Mortgage interest rates hit a high of 16% in 1981. Over the next 32 years, interest rates decreased by 64%. What was the interest rate in 2013?

A) 5.76%
B) 10.24%
C) 21.76%
D) 4.56%

Answer 1

The mortgage interest rate in 2013 was 10.24%.

Step-by-step explanation:

To find the interest rate in 2013, we need to calculate the decrease in interest rates over the 32-year period. Given that the interest rates decreased by 64% over this period, we can calculate the interest rate in 2013 as follows:

Let x be the interest rate in 1981. Therefore, 100% - 64% = 36% is the decrease in interest rates. So, the interest rate in 2013 is 36% less than the interest rate in 1981, or x - 0.36x = 0.64x. Thus, the interest rate in 2013 is 64% of the interest rate in 1981.

Therefore, if the interest rate in 1981 was 16%, the interest rate in 2013 would be 0.64 * 16 = 10.24%.