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22 February, 06:51

Assume Jennifer has owned an EE bond for 4 years. The fixed rate of interest is 10% and the current value of the bond is $4000. If Jennifer were to cash in the bond tomorrow, how much interest will she lose (approximately) as a penalty

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  1. 22 February, 07:40
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    400

    Explanation:

    Given:

    Face Value of the bond = $4000

    The fixed rate of interest is r = 10%

    If f Jennifer were not to cash in the bond tomorrow, it means she have the value of $4000 after 4 years. But tomorrow she were to cash, so the interest she lose is:

    I = FV*r = 4000*10% = 400
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