Question

Suppose a bond promises Rs. 500 at the end of two years with no intermediate return. If the rate of interest is 5 per cent per annum what is the price of the bond?

Answer 1

Here is your answer

Sum = Rs 500

T = 2 years

R = 5% p.a

As we know the formula
SI = PRT/100
$= \frac{500 \times 5 \times 2}{100} \\ \\ = 50$
so
Amount = P + SI
$= 500 + 50 \\ = 550$
Therefore price of bond after two years is Rs 550.

Hope it helps you