Question

On Dec 1,2007,you could buy a 10-year U.S.Treasury note(a kind of bond)for $10,000 that pays 4.21% simple interet every year through Dec 28,2017.How much total interest would it earn by then? Thanks!

Answer 1

You will get simple interest on the principal amount ($10,000) at 4.21%, given by:
Simple Interest=10000*0.0421*n

where n is the number of years equal to 10 years (ending on Dec 1, 2017) and 27 days from Dec 1, 2017 to Dec. 28, 2017, which is 27/365 years.
So n=10 27/365 in the above formula.

Answer 2

Please help solve the below question.I made a mistake on my first post.Show work please!

On Dec 28,2007,you could buy a 10-year U.S.Treasury note(a kind of bond)for $10,000 that pays 4.21% simple interet every year through Dec 28,2017.How much total interest would it earn by then? Thanks

Answer 3

The above answer stays, since the only change is the period from 10 years and 27 days to 10 years, so n is exactly 10 in the above formula:
Simple Interest=10000*0.0421*n