Suppose your city is building a new park, and issues bonds to raise the money to build it. You obtain a $3,000 bond that pays 4.2% interest annually that matures in 5 years. How much interest will you earn in total over the 5 years?


To calculate the total interest earned on the bond over 5 years, you can use the formula for simple interest:

\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]

Where:
- **Principal** is the initial amount of the bond, which is $3,000.
- **Rate** is the annual interest rate, which is 4.2%, or 0.042 in decimal form.
- **Time** is the duration in years, which is 5 years.

Substituting the values:

\[
\text{Interest} = 3000 \times 0.042 \times 5 = 630
\]

So, the total interest you will earn over the 5 years is **$630**.

Would you like further details or have any questions?

Here are five related questions you might find useful:
1. How would the interest change if the bond matured in 10 years instead of 5?
2. What is the total amount you will receive when the bond matures?
3. How does compound interest differ from simple interest in this context?
4. What would be the effect of a higher interest rate, say 5%, on your earnings?
5. How is the bond's interest taxed, and what impact does that have on your net earnings?

**Tip:** Always ensure you understand whether interest is compounded or simple when calculating returns on investments, as it can significantly impact your total earnings.

Suppose your city is building a new park, and issues bonds to raise the money to build it. You obtain a $3,000 bond that pays 4.2% interest annually that matures in 5 years. How much interest will you earn in total over the 5 years?

Discover how to calculate the total interest earned on a $3,000 bond with an annual interest rate of 4.2% over 5 years. This simple interest calculation is ideal for students in Grades 6-8 and covers fundamental concepts such as principal, interest rate, and time.

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