An investor purchased a 91-day, $100,000 T-bill on its date of issue for $97,500, and sold it 40 days later for $98,475. What simple interest rate of return did the original investor actually realize during the 40-day holding period?
A) 2.5%
B) 8.898%
C) 10.027%
D) 4.011%
E) 9.125%

Question

Quizplus · Accepted Answer

The Answer of An investor purchased a 91-day, $100,000 T-bill on its date of issue for $97,500, and sold it 40 days later for $98,475. What simple interest rate of return did the original investor actually realize during the 40-day holding period?
A) 2.5%
B) 8.898%
C) 10.027%
D) 4.011%
E) 9.125%

An Investor Purchased a 91-Day, $100,000 T-Bill on Its Date