Compute the interest rate, or yield, earned by a non-coupon-paying (discount) bond that is purchased on June 1, 2015 and that matures on May 31, 2017. Assume that the price per $100 face value of the bond is $95, the redemption value per $100 of face value is $100, and the basis is 0 (US (NASD) 30/360). Remember: You can express the bonds settlement and redemption dates either as a normal date (e.g., 6/01/2015 enclosed in quotation marks) or as a sequential integer value found using the DATEVALUE function. If you elect to use the sequential integer method, use the DATEVALUE to determine that the appropriate value for June 1, 2015 is 42156, and the corresponding date for May 31, 2017 is 42886. (Note: Round your answer to two decimal places.)

NOMINAL

RATE

EFFECT

DISC

A	B
1	Data	Description
2	NPER	7 x 12 = 84
3	PMT	500
4	PV	0
5	FV	100,000
6	[Type]	0
7	Interest Rate	=
8		= %

Compute the stated interest rate on a promotional credit card if the effective interest rate is 8.0%. Assume that interest is compounded (a) semi-annually and (b) quarterly. (Note: Round your answers to two decimal places.)

NOMINAL

DISC

RATE

EFFECT

	A	B
1	Data	Description
2	Compounded semi-annually
3	Interest Rate	=
4		= %
5	Compounded quarterly
6	Interest Rate	=
7		= %
8

Compute the actual interest rate paid or earned on a mortgage loan if the bank states that the nominal rate is 12%, and the interest is compounded (a) semi-annually and (b) quarterly. (Note: Round your answers to two decimal places.)

EFFECT

RATE

NOMINAL

DISC

	A	B
1	Data	Description
2	Compounded semi-annually
3	Interest Rate	=
4		= %
5	Compounded quarterly
6	Interest Rate	=
7		= %
8

Data	Description
2	Settlement date	6/1/2015
3	Maturity Date	5/31/2017
4	Price	95
5	Redemption value	100
6	Basis	0
7	Interest Rate	=
8		%