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If the interest rate one a one year bond is .45 with a principal of $1,000 what is the interest on the bond if it pays $1,000 after 2 years?

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Interest Rate Use the formula I = PRT. In this problem, 800=4000*5t. Divide both sides by 4000: 800/4000=5t or .2=5t. Divide both sides by 5; t=.2/5 or t=0.04. So the interest rate is 4%. Thanks and ChaCha!

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