Question

Victor calculates the percentage interest rate he needs to make $20 in simple annual interest over 2 months on a deposit of $1000. Where did he go wrong?

I = prt
20 = 1000 * r * 2
r = 0.01
r = 1%


A.) He should have divided 2 by 12 to get the value for t.
B.) He misrepresented the earned interest with the final balance.
C.) He applied the principal and interest to the wrong variables.
D.) He should have multiplied r by 100 to get the interest rate as a percentage.

Answer 1

A. It's not 2 years, but 2 months meaning 1/6 of a year.

Answer 2

thanks so much!

Answer 3

You're welcome :)