ROK-C issued a 90-day commercial papers (CPs) with the face value of $2,050,000. If these CPs...
ROK-C issued a 90-day commercial papers (CPs) with the face value of $2,050,000. If these CPs are sold at $1,900,000. The 90-day interest payment is $____; the 90-day interest rate is _____%; and its EAR on these commercial papers is ______%.
Homework Answers
90 day interest payment = Face value - Price
= 2050000-1900000
=$150,000
90 day interest rate = 150000/2050000 = 7.32%
EAR = (1+APR)^n -1
= (1+ 7.32%)^4 -1
=32.65%
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