Question

Carmelo puts $2,200.00 into savings bonds that pay a simple interest rate of 3.4%. How much money will the bonds be worth at the end of 5.5 years? (Find the total worth of the bonds in 5.5 years)

Answer 1

Let's begin by listing out the information given to us:

Principal (P) = $2,200, Interest rate (r) = 3.4% = 0.034, Time (t) = 5.5 years

`\begin{gathered} I=P\cdot r\cdot t=2200\cdot0.034\cdot5.5 \\ I=\text{ \$414.40} \end{gathered}`

The bond will be worth the sum of the Principal and the Interest:

`\begin{gathered} P+I=2200+411.40 \\ \Rightarrow\text{ \$}2611.40 \end{gathered}`