Drexel dragonThe Math ForumDonate to the Math Forum



Search All of the Math Forum:

Views expressed in these public forums are not endorsed by Drexel University or The Math Forum.


Math Forum » Discussions » sci.math.* » sci.math.independent

Topic: An old SAT problem
Replies: 11   Last Post: Apr 11, 2007 4:37 PM

Advanced Search

Back to Topic List Back to Topic List Jump to Tree View Jump to Tree View   Messages: [ Previous | Next ]
quasi

Posts: 10,191
Registered: 7/15/05
Re: An old SAT problem
Posted: Apr 10, 2007 7:16 PM
  Click to see the message monospaced in plain text Plain Text   Click to reply to this topic Reply

On Tue, 10 Apr 2007 14:04:58 -0400, "Stephen J. Herschkorn"
<sjherschko@netscape.net> wrote:

>jan.amos@yahoo.com wrote:
>

>>I ran across old (1926) SAT math problems and
>>one of them puzzles me -- it's stated as follows:
>>
>> A man buys a house and lot for $8,500 but is obliged to pay
>> $500 back taxes on the property. He leases the property at the
>> rate of $75 a month. What rate of interest does this investment
>> bear?
>>
>>I think I'm missing something here -- any clue?
>>

>
>My guess is that they want the nominal annual rate of interest for the
>following infinite stream of cash flows: A cost of $9000 at month zero
>and an income of $75 every month thereafter. The monthly rate could be
>figured out as 75 / 9000, yielding a nominal rate of 16.7% per annum.


Except that's the wrong answer.

An income of $75 per month equates to $900 per year, so the simple
annual interest rate is 10%, not 16.7%.

>As to what they wanted exactly, perhaps in 1926 the standard terminology
>was more well-known to the average college-bound student. Or, if
>test-takers got to write out the answer (as opposed to choosing a
>lettered answer), they could make precise what they are giving.


Since the test being discussed was an SAT test, it's almost certain
that it was multiple choice. I'll guess that the choices were
something like the following:

(a) 10% [correct answer]

(b) 10.58% [failed to add the tax, answer rounded to nearest
hundredth]

(c) (11 and 1/4)% [subtracted the tax instead of adding]

(d) (8 and 1/3)% [forgot to multiply $75 by 12, and also, moved the
decimal point one place too far to the right]

This is not a sophisticated problem -- we're talking about the SAT.
Thus, the test takers can be presumed to be a very general audience of
high school students. The test could legitimately assume math
knowledge up to what's now called precalculus, but most problems would
be below that level, requiring just basic reasoning skills and limited
math.

quasi



Point your RSS reader here for a feed of the latest messages in this topic.

[Privacy Policy] [Terms of Use]

© Drexel University 1994-2014. All Rights Reserved.
The Math Forum is a research and educational enterprise of the Drexel University School of Education.