Question 1186450

What is the annual interest rate earned by a 33-day T- bill with a maturity value of P 1,000 that sells for P 996.16? (Use 360 days for a year)
<pre>Apply the FUTURE VALUE formula, based on SIMPLE IMTEREST, which is: {{{matrix(1,3, A, "=", P(1 + TR))}}}, with {{{matrix(4,3, A, being, "$1,000", P, being, "$996.16", T, being, 33/360, R, being, Annual_interest_rate)}}}
{{{matrix(1,3, A, "=", P(1 + TR))}}} then becomes: {{{matrix(7,3, "1,000", "=", 996.16(1 + (33/360)R), 125, "=", 124.52(1 + (11R/120)), 125/124.52, "=", 1 + 11R/120, 125/124.52 - 1, "=", 11R/120, 125/124.52 - 124.52/124.52, "=", 11R/120, .48/124.52, "=", 11R/120, .12/31.13, "=", 11R/120)}}}
                                 11R(31.13) = .12(120) ------- Cross-multiplying
Annual Interest rate or {{{highlight_green(matrix(1,12, R, "=", .12(120)/11(31.13), "=", .04205239, "=", "4.2%", "(rounded", to, ONE, decimal, "place)"))}}}