Final answer:
To find the interest rate paid on Tammy's investment, we use the simple interest formula, which resulted in a rate of 3.334% when Tammy's principal of $500 earned $16.67 in interest over one year.
Step-by-step explanation:
The question asked is: "What is the percentage of interest paid when Tammy invested $500 and earned $16.67 at the end of the year?" We can answer this by using the formula for simple interest, which is Interest = Principal × rate × time.
In this case, Tammy's principal amount (P) is $500, the interest (I) is $16.67, and the time (t) is 1 year. We need to find the rate (r). Plugging the numbers into the formula, we get $16.67 = $500 × r × 1. To find the rate, we divide the interest by the product of the principal and the time: $16.67 / ($500 × 1) = r. This calculates to 0.03334, or 3.334% when converted to a percentage.