Question

Harley bought a one year $1000 treasury bond. He paid $950 for the treasury bond. What is his rate of return? Round to one decimal, such as: 6.7%.

0.053%
53%
5.3%
5%

Answer 1

Answer: 5.3%

Explanation:

The formula to compute rate of return is given by :-

Rate of return =
`\frac{\text{Selling price - investing price }}{\text{ investing price}}*100`

`=(1000-950)/(950)*100\%\\\\=(50)/(950)*100\%\\\\=(100)/(19)\%\\= 5.3\%`

Hence, his rate of return = 5.3%