SOLUTION: A bond with a face value of $10,000 in ten years was purchased for 5,988. What is the simple interest rate offered to the bond?

Question 998971: A bond with a face value of $10,000 in ten years was purchased for 5,988. What is the simple interest rate offered to the bond?
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
10,000-5,988= 4,012 is the interest
Time 10 years
Now apply the formula for interest:
I= PRT (Interest = Principal*rate*time)Isolate rate, divide both sides by PT:
I/PT= r Plug in the numbers:
4,012/5,988*10= r
4,012/59,880= r
0.067= r Multiply * 100 to get percent:
%r = 6.7%

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