Question

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

I equals p times r times t; one hundred equals one thousand times r times two; r equals zero point zero five 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.