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
Last year a certain bond with a face value of $5,000 yielded
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Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interestBTGmoderatorDC 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
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 ≈ 6154
Answer: E
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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: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
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 ≈ p
Answer: E
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