1.) tree three
2.) mistake mistakes
3.) there are only two mistakes
But how come the answer lists three mistakes while number 3 says that there are only two?
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Bingo. -- The original question states there are 3 mistakes, so that's a given. If the word "tree" were replaced with "two" then there would be 5 mistakes: the "r" "e" and "e" of "tree" would be 3 of them, the missing "h" is a fourth (the "t" is the only letter that is correct since it also occurs in "two"), and the missing "final s" for "mistake" makes 5. So changing "tree" to "three" by adding an "h" allows for fewer (fewer is better!) wrong letters than does changing "tree" to "two." Perhaps the original question should say there are
at least 3 typos in the sentence. Also, it depends whether you want to think that each wrong letter counts as a mistake, or if two or more wrong letters occur in the same word, that's only good for one "mistake."