Correct Answer: D
Explanation:
Arithmetic Interest problem
With simple annual interest, the formula to use is interest = principal x rate X time. It is given that S500 = $5,000 x p/100 x1(year), so p = 10 percent interest.
- (1) If p is 10 percent, then k= 0.8/ is 0.08. Using the same formula, the time is again 1 year; the
interest is the same amount; and the rate is 0.08, or 8 percent. Thus, S500 = principal x 0.08 x 1, or principal $6,250; SUFFICIENT.
- (2) If k= 8, then the rate is 8 percent, and the same formula and procedure as above are employed again; SUFFICIENT.
The correct answer is D; each statement alone is sufficient.
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