Question

what is the effective interest rate of an 8% 13-week treasury bill? assume it is a $10,00 treasury bill, and round to the nearest hundredth percent

Answer 1

The rate i=8% is for 1 year (52 weeks).
There are n=4 terms in a year.
The value of the bill ($10) is not used in this problem.

The effect interest rate (EAR)
EAR=(1+i/n)^n - 1
=(1+0.08/4)^4 - 1
=1.08243 - 1
=0.08243
=8.24% (to hundredth %)