Bert is planning to open a savings account that earns 1.6% simple interest yearly. He wants to earn exactly $240 in interest after 3 years. How much money should he deposit?
240/3 = 80
0.016x = 80
x = 5,000
To find out how much money Bert should deposit, we can use the formula for simple interest:
Interest = Principal * Rate * Time
Here, the interest is given as $240, the rate is 1.6% (which can be written as 0.016 as a decimal), and the time is 3 years. Let's substitute these values into the formula:
240 = Principal * 0.016 * 3
To solve for the principal amount, we can divide both sides of the equation by (0.016 * 3):
Principal = 240 / (0.016 * 3)
Principal ≈ 5000
Therefore, Bert should deposit approximately $5000 to earn exactly $240 in interest after 3 years.