saving bond currently worth $7600 collects 5.5% annual simple interest each year. if the bond was purchased seven yeara ago, how much was it bought for?
To find out how much the bond was bought for, we need to calculate the original principal amount using the formula for simple interest:
Simple Interest = (Principal) x (Rate) x (Time)
In this case, we are given the following information:
- Simple Interest = $7600
- Rate = 5.5%
- Time = 7 years
We can rearrange the formula to solve for the principal:
Principal = Simple Interest / (Rate x Time)
Substituting the given values:
Principal = $7600 / (0.055 x 7)
Now, let's calculate the principal:
Principal = $7600 / 0.385
Principal ≈ $19740.26
Therefore, the bond was originally bought for approximately $19,740.26.
A savings bond currently worth $7,600 collects 5.5% annual simple interest each year. If the bond was purchased seven years ago, how much was it bought for?
Set up equation where x=original cost,
7600=x(1+7*0.055)
Solve for x.