To find the value of the bond after 5 years, we’ll use the formula for simple interest:

$A = P(1 + rt)$

where:

• $A$ is the amount (future value of the bond),
• $P$ is the principal (initial investment) of $1200,
• $r$ is the interest rate of 4.7% (0.047 as a decimal),
• $t$ is the time in years, which is 5.

Step-by-Step Solution

1. Substitute the values into the formula:

   $A = 1200 \times (1 + 0.047 \times 5)$

2. Calculate the interest portion:

   $0.047 \times 5 = 0.235$

3. Add 1 to the interest:

   $1 + 0.235 = 1.235$

4. Multiply by the principal:

   $A = 1200 \times 1.235 = 1482$

Final Answer

After 5 years, the bond will be worth $1482.

Would you like more details on simple interest calculations, or do you have any questions?

Related Questions

1. How would the value change if the bond had compound interest instead?
2. What would the final value be if the interest rate was instead 5%?
3. How much interest would accumulate if the bond were held for 10 years?
4. What is the total interest earned on this bond after 5 years?
5. How would the value differ with a 3% interest rate over the same period?

Tip:

When calculating simple interest, always ensure that the rate is in decimal form and the time is in years to match the rate's time period.