A bond purchased for $950 was sold for $980 after one year. The interest received during the year is $25. The bond's yield is:

Name: A bond purchased for $950 was sold for $980 after one year. The interest received during the year is $25. The bond's yield is:
Brand: Quizplus
Rating: 4.9 (52 reviews)

Question

Quizplus · Accepted Answer

The bond's yield can be calculated using the following formula:

Yield = (Interest + (Sale Price - Purchase Price)) / Purchase Price

Yield = (25 + (980 - 950)) / 950 
Yield = 5.79%

Therefore, the answer is choice B, 5.79%.

A Bond Purchased for $950 Was Sold for $980 After