Question

James purchased five bonds of face value of $1,000 that paid 5% annual interest rate. the total annual interest income of james is _____. how do you work this problem out?

Answer 1

The total annual interest income of James is $250.

Explanation:

James purchased five bonds of face value of $1,000

So, total value of 5 bonds is =
`5*1000=5000` dollars

These bonds paid 5% annual interest rate.

So, interest becomes =
`0.05*5000=250` dollars

Hence, the total annual interest income of James is $250.

Answer 2

Given:
5 bonds of face value of 1,000 that paid 5% annual interest rate.

5 bonds x 1,000 = 5,000
5,000 x 5% x 1 year = 250

The total annual interest income of James is 250. Each bond earns 50 per annum.