Question

David owns $25,000 worth of 10-year bonds of ace corporation. these bonds pay interest every 6 months at the rate of 3%/year (simple interest). how much income will david receive from this investment every 6 months?

Answer 1

Answer:

$375

Explanation:

The computation of the income received after every 6 month is shown below:

= Worth owned of ace corporation × rate of simple interest

where,

Worth owned of ace corporation = $25,000

Rate of simple interest = 3% per year ÷ 2 = 1.5% per year

So, the income would be

= $25,000 × 1.5% per year

= $375

We ignored the time period given in the question