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A corporate bond paying $2,000 after 12 weeks earns 0.02% simple interest per week. How much did it cost to buy?

User Hobgoblin
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1 Answer

3 votes

Final answer:

The cost of the corporate bond is $8,333.33.

Step-by-step explanation:

To calculate the price of the corporate bond, we can use the formula for simple interest:

Interest = Principal * Rate * Time

Given that the bond pays $2,000 after 12 weeks and earns 0.02% simple interest per week, we can calculate the principal:

Principal = Interest / (Rate * Time)

Principal = $2,000 / (0.0002 * 12) = $8,333.33

Therefore, the bond cost $8,333.33 to buy.

User HunterLiu
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