On January 18, 2007, BusinessWeek reported yields on Treasury Bills. Bruce Martin purchased a $10,000 13 weekTreasury bill at $9,881.25. a) What is the interest amount? b) What is the effective rate of interest? (to the nearest hundredth of a percent)

On January 18, 2007, BusinessWeek reported yields on Treasury Bills. Bruce Martin purchased a $10,000 13 weekTreasury bill at $9,881.25. a) What is the interest amount? b) What is the effective rate of interest? (to the nearest hundredth of a percent)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 21P

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Question

On January 18, 2007, BusinessWeek reported yields on Treasury Bills. Bruce Martin purchased a $10,000 13 weekTreasury bill at $9,881.25.

a) What is the interest amount?

b) What is the effective rate of interest? (to the nearest hundredth of a percent)

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