Question

Bonnie Harper purchased twenty $1,000 bonds at 101.25. The twenty bonds earn 8% interest. What is the annual yield of this bond investment (to the nearest tenth of apercent)? Note: annual yield = (annual interest) + (selling price of the bond).6.8%7.9%8.4%9.1%None of these choices are correct.

Answer 1

this is

`\begin{gathered} \text{annual yield=}(8)/(100)(20)+(101.25)/(20) \\ \text{annual yield=0.08(20)+}(101.25)/(20) \\ \text{annual yield = 1.6+}5.2 \\ \text{annual yield = }6.8 \end{gathered}`

answer: 6.8%