Asked by Christy Kovaleski on May 30, 2024
Verified
A $100,000, 90-day commercial paper certificate issued by Bell Canada Enterprises was sold on its issue date for $98,950. What annual simple interest rate of return (to the nearest 0.001%) will it yield to the buyer?
Commercial Paper
A short-term, unsecured debt instrument issued by corporations to fund immediate needs.
Simple Interest
Interest assessed only on the starting principal, or on the remaining portion of the principal that is due.
Annual Rate
The interest rate for a period of one year, not accounting for compounding within that year.
- Examine the return and market rate of commercial paper and promissory notes.
- Understand the application of simple interest in financial instruments.
Verified Answer
RW
Learning Objectives
- Examine the return and market rate of commercial paper and promissory notes.
- Understand the application of simple interest in financial instruments.