Question

Harley bought a one year $1000 treasury bond. He paid $950 for the treasury bond. What is his rate of return? Round to one decimal, such as: 6.7%.
0.053%
53%
5.3%
5%

Answer 1

Answer: 5.3%

Step-by-step explanation:

The formula to compute rate of return is given by :-

Rate of return = $\dfrac{\text{Selling price - investing price }}{\text{ investing price}}\times100$

$=\dfrac{1000-950}{950}\times100\%\\\\=\dfrac{50}{950}\times100\%\\\\=\dfrac{100}{19}\%\\= 5.3\%$

Hence,  his rate of return = 5.3%