QUESTION

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Question 5: Debt payments of $\$ 700$ in two months and $\$ 800$ in five months are scheduled to be due. If interest at $8.3 \%$ p.a. Is allowed, what single payment today is required to settle the two scheduled payments? Answer 5.


Question 5 (8 marks): An investor purchased a $\$ 100,000$ 182-day T-bill on its date of issue to yield $5.5 \%$. When he sold it 30 days later, yields had dropped to $5.0 \%$. a. How much did the investor earn? b. Calculate the rate of return actually realized by the investor.

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