1. A U.S. Treasury bill that pays the holder $1,000 when it matures in one month is currently selling for $996.74.

a. Set up an equation for determining the interest rate on this bond.

b. What is the implied annual rate of interest for this bond?

c. Suppose the bond is a 6-month bond instead of a 1-month bond (i.e., it matures in six months rather than in one month). Using the interest rate you determined in (b) above, for how much would that bond sell today?