the annual interest rate earned by an investment increased by 10 percent from last year to this year. if the annual interest rate earned by the investment this year was 11 percent, what was the annual interest rate last year?

The interest rate is the amount charged by the lender to the borrower in addition to the principal amount. Regarding the receiver, a person who deposits money in a bank or other financial institution also makes additional money due to the time worth of money, which is known as interest received by the depositor.

It is given that,

Present year Rate of Interest = 11%

Increase in Interest rate from previous year = 10%

Let the Rate of Interest of previous year be ‘i’

Increased Interest rate = 10%*i = 1.1i

Now,

1.1i = 11%

i = 0.11/1.1

i = 0.1

= 10%

Therefore, the annual interest rate for last year is 10%.

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