Homework Answers
B. $ 974.42
| Purchase price | = | Maturity value | * | Discount factor | ||||
| = | $ 1,000.00 | * | 0.974421 | |||||
| = | $ 974.42 | |||||||
| Working: | ||||||||
| Discount factor | = | (1+i)^-n | Where, | |||||
| = | (1+0.02625)^-1 | i | = | 5.25%*26/52 | = | 0.02625 | ||
| = | 0.9744214 | n | = | 1 |
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