Question

A $1,000 corporate bond pays 6.5 percent a year. What is the annual interest you will receive each year?

Answer 1

Formula :

Interest (I)  =  (P T R ) / 100 ------------> (1)

Where, P  =  Princepal

             T  =  Time

             R  = Rate of Interest.

Given,  P = $1000

            T  =  1yr

            R  =  6.5%

Substitute P = $1000, T  =  1yr and  R  =  6.5% in Eq (1)

I  =  (1000 X 1 X 6.5 ) / 100

I  =  65

Answer :

Interest for 1 year is $ 65