1.On July 15th, Mary purchased a 6-month Government of Canada T-bill with a face value of $7,500 and a rate that would yield a 3% return. There is 150 days remaining in the term. Mary then sold the T-bill 87 days later on October 10th when the rate was at 1.80%. (Hint: a timeline might be helpful)

(a) How much did Mary pay for the T-bill when she purchased it on July 15th?

(b) What was the price that Mary sold the T-bill at October 10th?

(c) What is the rate of return realized by Mary from the sale of the T-bill?

2.Steve agreed to pay you $1,200 4 months ago and then another $1,500 today. Steve wasn't able to pay you the $1,200, so he offers to pay you $2,705 today. If money can earn 3%, would you accept his payment for full settlement of the debt?