A zero coupon T-bill with 4-month expiration and $1000 par is currently selling at $974. What...

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A zero coupon T-bill with 4-month expiration and $1000 par is currently selling at $974. What...

A zero coupon T-bill with 4-month expiration and $1000 par is currently selling at $974. What is your annual percentage yield (i.e. APR using simple annualization, not compounded)? (Provide your answer in percent rounded to two digits, omitting the % sign.)

P.S Please provide the correct answer

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Answer 1

Answer #1

Price of Zero Coupon Bond = $974

974 = 1,000/(1 + r)^4/12

r = 8.22%

So,

APR on Loan = 8.22%

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Answer 2

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