Bert is planning to open a savings account that earns 1.6% simple interest yearly. He wants to earn exactly $160 in interest after 2 years. How much money should he deposit?
7,000
To find out how much money Bert should deposit, we can use the formula for simple interest:
Interest = Principal × Rate × Time
In this case, Bert wants to earn $160 in interest over 2 years with an interest rate of 1.6%.
Let's say the principal amount he needs to deposit is P.
Using the formula, we have:
160 = P × 0.016 × 2
Simplifying the equation, we get:
160 = 0.032P
Next, we can solve for P by dividing both sides of the equation by 0.032:
P = 160 / 0.032
Calculating this, we find:
P ≈ $5,000
Therefore, Bert should deposit approximately $5,000 to earn exactly $160 in interest over 2 years.