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100 points for $49 worth of Veritas practice GMATs FREE VERITAS PRACTICE GMAT EXAMS Earn 10 Points Per Post Earn 10 Points Per Thanks Earn 10 Points Per Upvote ## Last year a certain bond yielded 5 percent of its face... tagged by: swerve ##### This topic has 2 expert replies and 1 member reply ### Top Member ## Last year a certain bond yielded 5 percent of its face... Last year a certain bond yielded 5 percent of its face value in interest. If that interest was approximately 4 percent of the bond's selling price of$7,500, what is the bond's face value?

A. $6,000 B.$6,750
C. $7,425 D.$7,500
E. $9,375 The OA is A. Please, can any expert explain this PS question for me? I can't get the correct answer. I need your help. Thanks. ### GMAT/MBA Expert Senior | Next Rank: 100 Posts Joined 16 Dec 2014 Posted: 94 messages Followed by: 4 members Upvotes: 2 GMAT Score: 770 Top Reply swerve wrote: Last year a certain bond yielded 5 percent of its face value in interest. If that interest was approximately 4 percent of the bond's selling price of$7,500, what is the bond's face value?

A. $6,000 B.$6,750
C. $7,425 D.$7,500
E. $9,375 The OA is A. Please, can any expert explain this PS question for me? I can't get the correct answer. I need your help. Thanks. I = Interest FV = Face Value (1) I = FV*0.05 (2) I = 0.04*7500 FV*0.05 = 0.04*7500 FV = (4/5)*7500 FV = 6000 Answer is A ### GMAT/MBA Expert GMAT Instructor Joined 09 Apr 2015 Posted: 1461 messages Followed by: 17 members Upvotes: 39 swerve wrote: Last year a certain bond yielded 5 percent of its face value in interest. If that interest was approximately 4 percent of the bond's selling price of$7,500, what is the bond's face value?

A. $6,000 B.$6,750
C. $7,425 D.$7,500
E. $9,375 Since 4% of$7,500 = 0.04 x 7,500 = $300, so$300 is the interest and itâ€™s 5% of the face value of the bond. If we let b = the bondâ€™s face value, we have:

0.05b = 300

b = 300/0.05

b = 6000 dollars

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Let the bond's face value be x
Therefore, the interest (I) = 5% of x = 0.05*x = 0.05x
Also, I == 4% of $7500 =I=0.04 (7500) =$300
Since I=0.05x =300
$$x=\frac{300}{0.05}$$
x=$6000 (option A) • Get 300+ Practice Questions 25 Video lessons and 6 Webinars for FREE Available with Beat the GMAT members only code • 1 Hour Free BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Free Veritas GMAT Class Experience Lesson 1 Live Free Available with Beat the GMAT members only code • Magoosh Study with Magoosh GMAT prep Available with Beat the GMAT members only code • FREE GMAT Exam Know how you'd score today for$0

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