To find the annual interest on a bond, you can use the following formula:
\(\[ \text{Annual Interest} = \text{Face Value} \times \text{Interest Rate} \]\)
Here are the steps to calculate it:
1. Identify the face value of the bond. In this case, the face value \(\( F \)\) is \\($1,000.
2. Determine the annual interest rate. The annual interest rate \( r \) is 8%, which can be written as a decimal for calculation purposes. To convert a percentage to a decimal, divide by 100:
\[
r = \frac{8}{100} = 0.08
\]
3. Multiply the face value of the bond by the annual interest rate:
\[
\text{Annual Interest} = F \times r = 1000 \times 0.08
\]
4. Perform the multiplication:
\[
1000 \times 0.08 = 80
\]
Therefore, the annual interest on the bond is \$\)80.
