BUSINESS • ECONOMICS What annual interest rate is earned by a 16-week T-bill with a maturity value of $2,400 that sells for $2,365.96? The annual interest rate is ---%

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter7: Exponents And Exponential Functions
Section7.8: Transforming Exponential Expressions
Problem 18PFA
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I was given the wrong answer in the picture attached. The expert used 2362.96 instead of 2365.96
BUSINESS • ECONOMICS
What annual interest rate is earned by a 16-week
T-bill with a maturity value of $2,400 that sells for
$2,365.96?
The annual interest rate is
%
Expert Answer O
Step1
a)
Please find the answer below.
Step2
b)
Annualized return on T-bill can be calculated as:
=> (Maturity Value-price) * 52/weeks to maturity
*1/price *100
= (2400-2362.86) * 52/16 * 1/2362.86 *100
= 5.11%
Therefore,
the annual interest rate is 5.11%.
Transcribed Image Text:BUSINESS • ECONOMICS What annual interest rate is earned by a 16-week T-bill with a maturity value of $2,400 that sells for $2,365.96? The annual interest rate is % Expert Answer O Step1 a) Please find the answer below. Step2 b) Annualized return on T-bill can be calculated as: => (Maturity Value-price) * 52/weeks to maturity *1/price *100 = (2400-2362.86) * 52/16 * 1/2362.86 *100 = 5.11% Therefore, the annual interest rate is 5.11%.
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