Question

Leona purchased a $1,000 bond having a quoted price of 99.875. She had to pay a 5.5% brokerage fee (of the selling price). What was the total cost of the bond (to the nearest whole cent)?

$943.82
$1,064.44
$534.77
$2,054.22
None of these choices are correct.

Answer 1

The total cost of the bond is none of the given choices.

Explanation:

The selling price of a $1000 bond = $99.875

The brokerage fee = 5.5 %

Now, 5.5% of $99.875 =
`(5.5)/(100) * 99.875=5.493`

So, the brokerage fee = $5.493

Now, to find out the total cost of the bond:

Total Cost = The selling Price + Brokerage Fee

= $99.875 + $5.493

=$ 105.368

or, the total price of the $1000 bond is $ 105.368.

Hence, the total cost of the bond is none of the given choices.