Last year a certain bond with a face value of $5,000 yielded

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BTGmoderatorDC: Moderator; Posts: 7187; Joined: Thu Sep 07, 2017 4:43 pmFollowed by: 23 members

by BTGmoderatorDC » Mon Mar 25, 2019 4:37 am

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Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price?

A. $4,063
B. $5,325
C. $5,351
D. $6,000
E. $6,154

OA E

Source: GMAT Prep

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Source: Beat The GMAT — Problem Solving | Mon Mar 25, 2019 4:37 am

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Brent@GMATPrepNow: GMAT Instructor; Posts: 16207; Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members; Location: Vancouver, BC; Thanked: 5254 times; GMAT Score:770

by Brent@GMATPrepNow » Mon Mar 25, 2019 5:31 am

BTGmoderatorDC wrote:Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price?

A. $4,063
B. $5,325
C. $5,351
D. $6,000
E. $6,154

Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest
8% of $5,000 = $400
So, interest = $400

If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price?
Let x = the bond's selling price
So, $400 = 6.5% of x
In other words: $400 = 0.065x
Solve: x = 400/0.065 â‰ˆ 6154

Answer: E

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8149; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Wed Mar 27, 2019 5:54 pm

BTGmoderatorDC wrote:Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price,approximately what was the bond's selling price?

A. $4,063
B. $5,325
C. $5,351
D. $6,000
E. $6,154

OA E

Source: GMAT Prep

We are given that a certain bond with a face value of $5,000 yielded 8% of its face value in interest. Thus, we can determine the interest as follows:

5,000 x 0.08 = 400

We also know that the $400 of interest was approximately 6.5% of the bond's selling price. Thus, we can create the following equation, where p = the bond's selling price:

400 = 0.065 x p

400/0.065 = p

400,000/65 = p

6,154 â‰ˆ p

Answer: E

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