Question

Kent bought a $2,000, 20-year U.S. Treasury bond that paid six percent annual yield when he was 22. How much would that bond be worth 20 years later when it matured?

Answer 1

The bond worth $ 4400 at the time of the bond maturity.

Explanation:

Principal amount = $ 2000

Rate of Interest = 6%

Number of years = 20

SI = Pnr

   = 2000 × 6  × 20 / 100

  = $ 2400

The bond worth when it was matured is $ 2000 + $ 2400 = $ 4400