Interest yields
Hathi
Registered Posts: 2 New contributor 🐸
5% treasury stock. Current market price £110 over 4 years.
I am having trouble trying to work out
Investment A pays interest of 1.7% every 3 months.
The answer is 6.975.
Please can everyone explain
I am having trouble trying to work out
Investment A pays interest of 1.7% every 3 months.
The answer is 6.975.
Please can everyone explain
0
Comments
-
Hello,
1.017^4 = 1.06975
1.06975 - 1 = 0.06975
0.06975 * 100 = 6.975 %
The ^ sign represents to the power of, as the investment is paying every 3 months (each quarter) there will be 4 payments.
Hope this helps.
0 -
Thank you0
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