Question

Last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest. If that interest was approximately 6.5 percent of the bond's selling price, approximately what was the bond's selling price?A. $4,063
B. $5,325
C. $5,351
D. $6,000
E. $6,154

Answer 1

Answer:

E. $6,154

Step-by-step explanation:

Let x represent selling price of the bond.

We have been given that last year a certain bond with a face value of $5,000 yielded 8 percent of its face value in interest.

Let us calculate 8% of $5,000 to find amount of interest as:

$\text{Amount of interest }=\ 5,000\times \frac{8}{100}$

$\text{Amount of interest }=\ 50\times 8$

$\text{Amount of interest }=\ 400$

We are also told that the amount of interest was approximately 6.5 percent of the bond's selling price. 6.5 percent of the bond's selling price would be $\frac{6.5}{100}x$.

We can represent our given information in an equation as:

$\frac{6.5}{100}x=\ 400$

$100*\frac{6.5}{100}x=\ 400*100$

$6.5x=\ 40,000$

$\frac{6.5x}{6.5}=\frac{\ 40,000}{6.5}$

$x=\ 6,153.846153846$

$x\approx \ 6,154$

Therefore, the selling price of the bond was approximately $6,154 and option E is the correct choice.