What annual interest rate is earned by 19a -week T-bill with a maturity value of 2500$ that sells for 2446.01$?
To find the annual interest rate earned by a T-bill, we can use the formula:
Interest = (Maturity Value - Purchase Price) / Purchase Price * (52 / Number of Weeks)
Where:
Maturity Value = $2500
Purchase Price = $2446.01
Number of Weeks = 19
Interest = (2500 - 2446.01) / 2446.01 * (52 / 19)
Using a calculator to simplify the equation, we find:
Interest = 53.99 / 2446.01 * (52 / 19)
= 0.0221 * 2.7368
= 0.0604
Therefore, the annual interest rate earned by the 19-week T-bill is approximately 6.04%.