We are testing whether the mean is different from zero (a two-tailed test): Null hypothesis, $H_0: \mu = 0\%$ Alternative hypothesis, $H_1: \mu \neq 0\%$

The test statistic is calculated as: $t = \frac{\bar{x} - \mu}{\sigma / \sqrt{n}} = \frac{1\% - 0\%}{2\% / \sqrt{110}} = \frac{1}{0.1907} \approx 5.24$

Since the calculated t-statistic (5.24) is much larger than the critical value for a two-tailed test at the 5% significance level (approximately 1.96), we reject the null hypothesis $H_0$.