If you buy a $10,000 par value,three-month T-bill priced at $9,800,what will your return (not annualized)on investment be?

Question

Quizplus · Accepted Answer

The formula to calculate the return on investment is:
Return on investment = (Face value - Purchase price) / Purchase price

In this case, the face value is $10,000 and the purchase price is $9,800. So, the return on investment would be:

Return on investment = (10,000 - 9,800) / 9,800 = 0.0204 or 2.04%

Therefore, the best choice is C with a return on investment of 2.04%.

If You Buy a $10,000 Par Value,three-Month T-Bill Priced at $9,800,what