Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 10 Bob purchased a promissory note on January 1st, 2009 which agreed to pay simple interest in the amount 8.0% per year. The note

image text in transcribedimage text in transcribed

Question 10 Bob purchased a promissory note on January 1st, 2009 which agreed to pay simple interest in the amount 8.0% per year. The note will mature and be paid on April St 2009, 90 days later. Bob 1 sells the note to Sally on February 12 2009 (i.e. 42 days after purchasing) for an amount that causes Sally's yield rate on the note to be equivalent to simple interest of 6.3% per year. Sally cashes in the note on April 1 2009 for 5000.00 Note: There are 365 days in a year What is Bob's annual yield rate (simple interest) on the note? Give your answer as a percentage rounded to two places. Do not round your calculations, at least not too much, until the very end

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Course On Financial Mathematics

Authors: M V Tretyakov

1st Edition

1908977388, 978-1908977380

More Books

Students also viewed these Finance questions

Question

a. When did your ancestors come to the United States?

Answered: 1 week ago

Question

d. What language(s) did they speak?

Answered: 1 week ago

Question

e. What difficulties did they encounter?

Answered: 1 week ago