Question

Victor calculates the percentage interest rate he needs to make twenty dollars in simple annual interest over 2 months on a deposit of one thousand dollars. Where did he go wrong?

I equals p times r times t; twenty equals one thousand times r times two; r equals zero point zero one; r equals one percent

He applied the principal and interest to the wrong variables.

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

He misrepresented the earned interest with the final balance.

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

Answer 1

Since the simple interest formula is

I = interest earned (20) he got this right
P = principal / original balance (1000) he got this right
R = Rate (solving for this)
T = time (in years)

Since this is only a 2 month process...and simple interest is measure in terms of years! He should not have multiplied by 2 for 't' by instead by 2/12 for 't'

Answer 2

That would be B correct

Answer 3

Correct!

Answer 4

Okay thank you so much! You're a life saver! :D

Answer 5

No problem!