An interest rate rises from 5% to 8%. By how many percentage points did the rate increase, and what is the percent increase relative to…

The increase in percentage points is the plain difference: $8-5=3$ points. The percent increase compares the change to the original rate: $\frac{3}{5}=0.60$, or $60\%$. So the answer is $3$ percentage points and a $60\%$ increase, choice B. Choice A divides by the new rate, $\frac{3}{8}=37.5\%$, but percent change is always measured against the starting value. Choice C reports $8$ points, which confuses the new rate with the change. Choice D reports a $3\%$ increase, confusing percentage points with percent change. The two measures differ whenever the starting rate is not $100\%$.