Bert is planning to open a savings account that earns 1.6% simple interest yearly. He wants to earn exactly $336 in interest after 3 years. How much money should he deposit?

Question

A.
$70
B.
$7,000
C.
$5,376
D.
$700

Answer 1

To calculate the amount Bert should deposit, we can use the formula for simple interest:

Interest = Principal x Rate x Time

Given that Bert wants to earn $336 in interest after 3 years at a rate of 1.6%, we can plug in the values:

336 = Principal x 0.016 x 3

336 = 0.048 x Principal

Dividing both sides by 0.048:

Principal = 336 / 0.048
Principal = $7,000

Therefore, Bert should deposit $7,000 to earn $336 in interest after 3 years. Answer B. $7,000.