Question

Johnny and Darren both earn $250 working on their respective neighbors' big farms. Johnny puts his $250 in the piggy bank that his parents gave him to encourage him to save. Darren puts his money in a savings account his parents set up for him. The savings account pays 6% interest. They both take their money out after 6 years. How much more money does Darren have than Johnny?

Answer 1

Johnny puts his $250 in the piggy bank, so he has $250 to begin with and no interest earned. Darren puts his $250 in a savings account that earns 6% interest per year. After 6 years, the amount of money in the account is:

$250 x (1 + 0.06)^6 = $340.78 (rounded to two decimal places)

Therefore, Darren has $340.78 - $250 = $90.78 more money than Johnny.