Victor calculates the percentage interest rate he needs to make $500 in simple annual interest over 5 years on a deposit of $1,000 . Where did he go wrong?

I = prt
$1,000 = 500 *r *5
r = 0.4
r = 40%

He applied the principal and interest to the wrong variables.

He should have divided 2 by 12 to get the value for t.

He misrepresented the earned interest with the final balance.

He should have multiplied r by 100 to get the interest rate as a percentage.

Question

Victor calculates the percentage interest rate he needs to make $500 in simple annual interest over 5 years on a deposit of $1,000 . Where did he go wrong?

 I = prt
$1,000 = 500 *r *5
 r = 0.4
 r = 40%

He applied the principal and interest to the wrong variables.

 He should have divided 2 by 12 to get the value for t.

 He misrepresented the earned interest with the final balance.

 He should have multiplied r by 100 to get the interest rate as a percentage.

kropot72 · Answer

The correct calculation is:
$500 = 1000 * r * 5
$$r=\frac{500}{1000\times 5}$$

eyust707 · Answer

yes $\Uparrow$$\Uparrow$$\Uparrow$$\Uparrow$
 p is the principal amount.. which is how much the loan is for
i is the interest.. how much you make on the loan.. 

notice the principal was 1000 but they put that value where the interest goes

eyust707 · Answer

And the interest Victor wants is 500 so that should go in the place of i

faman39 · Answer

Thank u so much guys for helping !!!!!!! :) you guys are truly life saver :)

faman39 · Answer

thank u! :)

kropot72 · Answer

You're welcome :)