Tiffany purchased a $10,000, 13-week Treasury bill that is paying 2.25%. What is the effective rate on this T-bill? (round to the nearest hundredth of a percent)

Question

Quizplus · Accepted Answer

To calculate the effective rate on this T-bill, we need to use the formula:
effective rate = (1 + nominal rate/52)^(52/13) - 1
Plugging in the values, we get:
effective rate = (1 + 0.0225/52)^(52/13) - 1
effective rate = 0.022617 or 2.26% rounded to the nearest hundredth of a percent. Therefore, the correct answer is C.

Tiffany Purchased a $10,000, 13-Week Treasury Bill That Is Paying