Question

Elena’s aunt bought her a $150 savings bond when she was born. When Elena is 20 years old, the bond will have earned 105% in interest. How much will the bond be worth when Elena is 20 years old?

Answer 1

The correct answer is $307.5

Explanation:

The total of the bond after 20 years is $150 plus the interests during this time (105% of $150). This last value can be calculated by multiplying the percentage (105) by the total ($150) and dividing it into 100% (total percent represented by $150. The process is shown below:

$150 = 100$%

$x = 105$%

$x = \frac{150 x 105}{100}$

$x = 157.5$

This means the total money in interest is $157.5 and this added to $150 is equivalent to $307.5