What is his effective rate of this financial accounting question? Matthew Lindstrom bought a $15,000, 26-week Treasury billat an annual discount rate of 4.5%. What is his effective rate?(Round to the nearest hundredth percent.)

Step 1: Definition of Effective Interest RateThe effective interest rate (EIR) is the interest rate…

Answered: Matthew Lindstrom bought a $15,000,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 21P

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Matthew Lindstrom bought a $15,000, 26-week Treasury bill at an annual discount rate of 4.5%. What is his effective rate? (Round to the nearest hundredth percent.)