Bob purchased a promissory note on January 1st, 2009 which agreed to pay simple interest in...

 

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Bob purchased a promissory note on January 1st, 2009 which agreed to pay simple interest in the amount 8.0% per year. The note will mature and be paid on April 1st, 2009, 90 days later. Bob sells the note to Sally on February 12th, 2009 (i.e. 42 days after purchasing) for an amount that causes Sally's yield rate on the note to be equivalent to simple interest of 6.3% per year. Sally cashes in the note on April 1st, 2009 for 5000.00. Note: There are 365 days in a year. What is Bob's annual yield rate (simple interest) on the note? Give your answer as a percentage rounded to two places. Do not round your calculations, at least not too much, until the very end. Bob purchased a promissory note on January 1st, 2009 which agreed to pay simple interest in the amount 8.0% per year. The note will mature and be paid on April 1st, 2009, 90 days later. Bob sells the note to Sally on February 12th, 2009 (i.e. 42 days after purchasing) for an amount that causes Sally's yield rate on the note to be equivalent to simple interest of 6.3% per year. Sally cashes in the note on April 1st, 2009 for 5000.00. Note: There are 365 days in a year. What is Bob's annual yield rate (simple interest) on the note? Give your answer as a percentage rounded to two places. Do not round your calculations, at least not too much, until the very end.

Answer rating: 100% (QA)

Bobs Annual Yield Rate 1 Calculate the total interest Sally receives Face value of the note 5000 2 C... View the full answer