Answer: he should pay $23095 for this bond.
Step-by-step explanation:
We would apply the formula for determining simple interest which is expressed as
I = PRT/100
Where
I represents interest paid on the bond purchased.
P represents the principal or amount of bond purchased.
R represents interest rate
T represents the duration of the bond in years.
From the given information,
R = 11%
T = 9 months = 9/12 = 0.75
I = 25000 - P
Therefore
25000 - P = (P × 11 × 0.75)/100
25000 - P = 8.25P/100 = 0.0825P
P + 0.0825P = 25000
1.0825P = 25000
P = 25000/1.0825
P = $23095
