Last year, a certain bond with face value of $5000 yielded 8% of its face value in interest.REINE wrote:Last year, a certain bond with face value of $5000 yielded 8% of its face value in interest. If that interest was approximately 6.5% of the bond selling price. Approximately what was the bond's selling price.
A. $4063
B. $5325
C. $5351
D. $6000
E. $6154
8% interest on the $5000 bond = (0.08)(5000) = $400.
... that interest was approximately 6.5% of the bond selling price.
In other words, 6.5% of the selling price ≈ $400
Let B be the bond selling price.
So, 6.5% of B ≈ $400
Rewrite: (6.5/100)B ≈ $400
Multiply both sides by 100/6.5 to get: B ≈ (100/6.5)($400)
Or: B ≈ 40000/6.5
B ≈ 6150
Answer: E
Cheers,
Brent
