Question

Tyler's mom purchased a savings bond for Tyler. The value of the savings bond increases by 4% each year. One year after it was purchased , the value of the savings bond was $156. Find the value of the bond when Tyler's mom purchased it. Explain your reasoning.

Answer 1

The original value of Tyler's savings bond before the 4% yearly increase was $150. This was calculated by dividing the known value after one year ($156) by 1.04.

Step-by-step explanation:

To find the original value of Tyler's savings bond before the 4% increase, we need to perform a simple calculation that reverses the increase. We know the bond value after one year is $156, which represents 104% of the original value (the 100% initial value plus the 4% increase). To find the original value, we divide the current value by 1.04 (which represents 104% expressed as a decimal).

Original Value = Final Value / (1 + Percentage Increase)
Original Value = $156 / 1.04
Original Value = $150

Therefore, the original purchase value of the bond was $150.

Answer 2

Tyler's mom purchased a savings bond for Tyler. The value of the savings bond increases by 4% each year. One year after it was purchased, the value of the savings bond was $156.

Find the value of the bond when Tyler's mom purchased it. Explain your reasoning.

Step-by-step explanation: