Assume the $19,500 Treasury bill, 4% for 15 weeks. Calculate the effective rate of interest. (Use...
Assume the $19,500 Treasury bill, 4% for 15 weeks. Calculate the effective rate of interest. (Use calendar year. Round your answer to the nearest hundredth percent.) Effective rate of interest:
Homework Answers
EAR = [1 + r]m - 1
= [1.04](52/15) - 1 = 1.1456 - 1 = 0.1456, or 14.56%
m = No. of compounding periods in a year
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