Mercury draws a cash flow diagram to model the following scenario. A 180-day commercial bill will mature for $500000. The price paid for the bill at issue was $487897.47. The bill was sold 70 days after issue for $496805.48. Calculate the annual rate of simple interest (as a percentage, to two decimal places) earned by the buyer who paid $487897.47 and sol for $496805.48. What was the annual rate of simple discount (as a percentage, to two decimal places) that the buyer sold at (earning a price of $496805.48)? Here is the cash flow diagram they drew. Investor U A W Which response best reflects the values of Z, Y, X, W, V, U, T and S? Z a. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.12% p.a. (simple discount) and S is 9.52% p.a. (simple interest). b. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.02% p.a. (simple discount) and S is 9.62% p.a. (simple interest). c. Z is 180.00, Y is $500000.00, X is $487897.47, W is 110.00, V is $496805.48, U is not required, T is 3.33% p.a. (simple discount) and S is 6.06% p.a. (simple interest). d. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.03% p.a. (simple discount) and S is 10.25% na (simple interest)
Mercury draws a cash flow diagram to model the following scenario. A 180-day commercial bill will mature for $500000. The price paid for the bill at issue was $487897.47. The bill was sold 70 days after issue for $496805.48. Calculate the annual rate of simple interest (as a percentage, to two decimal places) earned by the buyer who paid $487897.47 and sol for $496805.48. What was the annual rate of simple discount (as a percentage, to two decimal places) that the buyer sold at (earning a price of $496805.48)? Here is the cash flow diagram they drew. Investor U A W Which response best reflects the values of Z, Y, X, W, V, U, T and S? Z a. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.12% p.a. (simple discount) and S is 9.52% p.a. (simple interest). b. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.02% p.a. (simple discount) and S is 9.62% p.a. (simple interest). c. Z is 180.00, Y is $500000.00, X is $487897.47, W is 110.00, V is $496805.48, U is not required, T is 3.33% p.a. (simple discount) and S is 6.06% p.a. (simple interest). d. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.03% p.a. (simple discount) and S is 10.25% na (simple interest)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Mercury draws a cash flow diagram to model the following scenario.
A 180-day commercial bill will mature for $500000. The price paid for the bill at issue was $487897.47. The bill was sold 70 days after issue for
$496805.48. Calculate the annual rate of simple interest (as a percentage, to two decimal places) earned by the buyer who paid $487897.47 and sold
for $496805.48. What was the annual rate of simple discount (as a percentage, to two decimal places) that the buyer sold at (earning a price of
$496805.48)?
Here is the cash flow diagram they drew.
Investor
W
U
Z
Which response best reflects the values of Z, Y, X, W, V, U, T and S?
a. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.12% p.a. (simple discount) and S is 9.52%
p.a. (simple interest).
b. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.02% p.a. (simple discount) and S is 9.62%
p.a. (simple interest).
c. Z is 180.00, Y is $500000.00, X is $487897.47, W is 110.00, V is $496805.48, U is not required, T is 3.33% p.a. (simple discount) and S is
6.06% p.a. (simple interest).
d. Z is 180.00, Y is $500000.00, X is $487897.47, W is 70, V is $496805.48, U is not required, T is 2.03% p.a. (simple discount) and S is 10.25%
p.a. (simple interest).
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