Question

A retired couple invested $8000 in bonds. At the end of one year, they received an interest payment of $504. What was the simple interest rate of the bonds? Do NOT round off a decimal answer.

Answer 1

Hi there! In order to find the simple interest rate of the bonds, we have to divide the received payment by the bonds invested in them. 504/8,000 is 0.063. This number is in decimal form, but let's multiply by 100 to get the percentage of the number. 0.063 * 100 is 6.3. There. The simple interest rate of the bonds is 6.3%.