Question
Suppose you are looking to buy a $10,000 face value 13-week T-bill. If you want to earn at least 4% annual interest, what is the most you should pay for the bill?
Round your answer to the nearest penny.
Round your answer to the nearest penny.
Answers
Henry
P = Po + Po*r*t = 10,000.
Po + Po*(0.04/52)*13 = 10,000.
Po + 0.01Po = 10,000.
1.01Po = 10,000.
Po = $9900.99
Po + Po*(0.04/52)*13 = 10,000.
Po + 0.01Po = 10,000.
1.01Po = 10,000.
Po = $9900.99