Final answer:
The cost to buy the bond was calculated by first determining the total interest over 24 weeks, which was subtracted from the final payment to find the original cost, resulting in $2,971.20.
Step-by-step explanation:
The student asked how much it cost to buy a corporate bond paying $3,000 after 24 weeks, which earns 0.04% simple interest per week. To calculate the original cost (present value) of the bond, we need to determine the total interest paid over the 24 weeks and subtract it from the final payment.
The total interest earned can be calculated by multiplying the weekly interest rate by the number of weeks and then by the principal, i.e., interest = principal × interest rate per week × number of weeks. Then, the original cost of the bond can be found by subtracting the total interest from the final payment made after 24 weeks.
Calculating the total interest: Interest = $3,000 × 0.0004 × 24 = $28.80
The original cost of the corporate bond is therefore: $3,000 - $28.80 = $2,971.20.