Interest Earned. Lisa is depositing $3,500 in a six-month CD that pays 1.75% interest. How much interest will she accrue if she holds the CD until maturity?

 

5. T-bill Return. Troy paid $9,800 for a T-bill with a face value of $10,000. What is Troy's return if he holds the T-bill to maturity?

7. Return on T-bills. Dave has $20,000 excess cash to invest. He can purchase a $20,000 T-bill for $19,800 or two $10,000 T-bills for $9,850 each. Which will give him the better return?

9. Annualized T-bill Rate. Brenda purchased a $30,000, ninety-day T-bill for $29,850. What will Brenda's return be when the T-bill matures? What will her annualized rate be?

11. Investment Return. Thomas can invest $10,000 by purchasing a one-year T-bill for $9,775, or he can place the $10,000 in a twelve-month CD paying 2.5%. Which investment will provide a higher return? In addition to return, what else should Thomas consider when making his investment decision?

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