Your friend Michelle is starting a fitness center that specializes in helping people get in shape through exercise and eating healthy.Because her business is new and risky,she is unable to obtain a loan from the local bank.You agree to pay $7,500 for a one-year bond from Michelle with an interest rate of 5 percent.The face value of the bond is

Question

Quizplus · Accepted Answer

To find the face value of the bond, we need to add the interest to the principal. The interest is calculated as 5% of the principal, which is ($7,500 x 5%) = $375.

The face value of the bond is the principal plus the interest, which is ($7,500 + $375) = $7,875. Therefore, the best choice is A.

Your Friend Michelle Is Starting a Fitness Center That Specializes