Question

Tayler's mom purchased a savings bond for Tyler. One year after it was purchased, the value of the savings bond was $156. If the value of the savings bond increases by 4% after one year, what was the value of the bond when Tyler's mom purchased it? Explain or show your reasoning.

Answer 1

Answer: The value of the bond when Tyler's mom purchased it = $150

Step-by-step explanation:

Let x= Purchasing price of the bond.

Given: Rate of increase in its value = 4% = 0.04

Value of bond after one year = x+ 4% of x

= x+0.04x

= 1.04x

One year after it was purchased, the value of the savings bond was $156.

$\Rightarrow\ 1.04x = 156\\\\\Rightarrow\ x=\dfrac{156}{1.04}\\\\\Rightarrow\ x=150$

Hence, the value of the bond when Tyler's mom purchased it = $150