Question

Victor calculates the percentage interest rate he needs to make $20 in simple annual interest over 2 months on a deposit of $1,000. Where did he go wrong?

http://learn.flvs.net/webdav/assessment_images/educator_math2/v9/05_PP_10_098.gif

Answer 1

The image doesn't show up and all it says is "cookie error" with a bunch of error codes

Answer 2

I think it needs me to log in? but idk

Answer 3

Alright Thanks;/

Answer 4

try attaching the image here

Answer 5

by clicking "attach file"

Answer 6

1 Sec.

Answer 7

ok

Answer 8

take a screenshot if you have to, that's the best way

Answer 9

there.

Answer 10

thanks, one sec

Answer 11

ok i see where he went wrong

the variable t in the formula I = Prt is the time in YEARS, not months

Answer 12

so what he's calculating is the interest rate to earn $20 in interest over 2 years, not 2 months

Answer 13

so what he needs to do to fix things is to replace the 2 at the end with 2/12 because 2/12 years = 2 months

then he needs to recalculate to find r

Answer 14

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

Answer 15

you'll find that you need a much higher interest rate to earn $20 in interest in two months

Answer 16

yes

Answer 17

because t is in years, not months

Answer 18

thank you.

Answer 19

the way you remember this is to think annual interest rate

annual = yearly

Answer 20

the yearly interest rate corresponds to the years for t

Answer 21

you're welcome