Question

Asked Apr 17, 2019

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What is the effective, compound rate of interest you earn if enter into a repurchase agreement in which you buy a tresaury bill for $76,789 and agree to sell it after a month (30 days ) for $77,345? what is the compound rate of interest you pay if you sell a tresaury bill for $76,789 and repurchase it after 30 days for $77,345?

Step 1

**Calculation of Compound Rate of Interest:**

The compound rate of interest can be calculated using a excel function =RATE. **The excel function is shown below:**

Step 2

**The excel workings are shown below:**

Step 3

**Alternatively using formula,**

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