Michelle buys a bond for $5,000. every year that she holds the bond, she'll receive interest payments of $250. the interest rate on the bond is

a. 2 percent.

b. 5 percent.

c. 40 percent.

d. 20 percent.

This can be solve using the formulaF = P (1 + i) ^nwhere F is the future worth of the bondP is the cost of the bondi is the interest raten is the number of years

F = 5000 + 250F = 5250

5250 = 5000 (1 + i) ^1solve for ii = 5250/5000 - 1i = 0.05i = 5 %