SOLUTION: A T-bill is a type of bond that is sold at a discount over the face value. For example, suppose you buy a 26-week T-bill with a face value of $8,000 for $7,700. That means that in

Question 1014126: A T-bill is a type of bond that is sold at a discount over the face value. For example, suppose you buy a 26-week T-bill with a face value of $8,000 for $7,700. That means that in 26 weeks (half a year), the government will give you the face value, earning you $300. What annual interest rate have you earned?
Round your answer to the nearest tenth of a percent.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
you earned 300 in half a year.

that's an interest rate of 300/7700 = .038961039 for a half a year.

multiply that by 2 to get a nominal interest rate of 2 * .038961039 = .0779220779 per year.

multiply that by 100 to get an interest rate of 7.79220779% per year.

round that to a tenth of a percent to get 7.8% per year.

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