Question

William purchases a savings bond from the United States Treasury. The principal amount of the bond is $3,000

, and the terms of the bond are a 5%
yield with a maturity date set for 8 years in the future from the date of purchase. William is trying to calculate his return on his investment. What is the amount of interest William can expect to earn over the lifetime of the bond?(1 point)
Responses

$3,150
3,150 dollars

$4,200
4,200 dollars

$150
150 dollars

$1,200

Answer 1

[AI-generated answer — Bot GPT 3.5]

The amount of interest William can expect to earn over the lifetime of the bond can be calculated using the formula for simple interest:

Interest = Principal x Rate x Time

Interest = $3,000 x 0.05 x 8
Interest = $3,000 x 0.4
Interest = $1,200

Therefore, William can expect to earn $1,200 in interest over the lifetime of the bond.