Answer:
The principal of the bond can be calculated using the formula Principal = Interest / Rate x Time. In this case, the interest is $3,875, the rate is 7.75%, and the time is 25 years. Therefore, the principal of the bond is: Principal = $3,875 / 0.0775 x 25 = $20,000.
Explanation:
The principal of the bond can be calculated using the formula Principal = Interest / (Rate x Time), where Interest, Rate and Time are given in the problem statement.
By using this formula, the principal of the bond is $20,000. This is the amount of money that was invested to earn the interest of $3,875 over 25 years with the interest rate of 7.75%.