Assessment 2 - Task 1.8 - Cash Management

Kylie_Mounce

Hi -

Could someone please explain how I would reach the answer here -

An auction on 8% Treasury Stock 20X3 was undertaken by the UK DMO. The nominal (face value) of the gift is £100. A company purchased £200,000 nominal value at a price of £212,000.

Calculate how much interest the company will receive for each 6 month period and the interest yield (to 2 decimal places)

The company will receive £.(8,000). interest every 6 months and the interest yield is .(7.55).%

I get as far as 8/100 = 0.08. Not sure how I would get to '8,000' from the figures used though or if I am even going in the right direction.

Mike Webster

HI

£200,000 x 8% x 1/2 a year (interest received half-yearly)

Does that help?

Smiller94

Hi,

Thanks for the above this also helped me.

Do you know how to work out the interest yield of 7.55% at all please?

Thanks so much in advance.

Mike Webster said:

HI

£200,000 x 8% x 1/2 a year (interest received half-yearly)

Does that help?

N4T

Hello,

This is a stab in the dark as I have not studied this unit.

Interest yield = return on investment?

Price paid £212,000
Interest received for 12 months £16,000
£16,000 / £212,000 = 7.55%

I don't have any books to refer to but if asked in an exam this would be my answer.