Assume that you purchase a $1,000 bond issued by GE that pays 5% interest each year. What is the annual interest amount?

Name: Assume that you purchase a $1,000 bond issued by GE that pays 5% interest each year. What is the annual interest amount?
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Question

Quizplus · Accepted Answer

To calculate the annual interest amount, we simply multiply the face value of the bond ($1,000) by the annual interest rate (5% or 0.05):
$1,000 x 0.05 = $50.00.
Therefore, the answer is D) $50.00.

Assume That You Purchase a $1,000 Bond Issued by GE