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 value of the bond when Tyler's mom purchased it is $150.

Solution:

The value of the savings bond after 1 year = $156

The value of the savings bond increased each year = 4%

To find the value of the bond when Tyler's mom purchased it.

Let x be the cost price when it was purchased.

Cost price when it was purchased + increased percentage =  new price

⇒ x + 4% of x = 156

To convert percentage to fraction, divide by 100.

  $x+\frac{4}{100}\times x=156$

Do cross multiplication to make the denominator same.

$\frac{100x}{100}+\frac{4x}{100}=156$

 $\frac{100x+4x}{100}=156$

         $\frac{104x}{100}=156$

Do cross multiplication.

$104x=156\times100$

$104x=15600$

Divide by 104 on both sides, we get

x = 150

Hence the value of the bond when Tyler's mom purchased it is $150.