It is required to calculate the annual interest rate earned by a T-bill, whose maturity value is $1000 and sells for $966.16 over 33 days.
Here, the amount the bill is sold for is the principal (initial amount), the time elapsed is 33 days, the amount at the end of 33 days is the maturity value.
Since it is an annual interest, convert the time to years. Divide 33 by the number of days in a year (365):
[tex]33\text{ days}\equiv\frac{33}{365}\text{years}[/tex]Recall the formula for amount earned (A):
[tex]A=P(1+rt)[/tex]Substitute A=1000, P=966.16, and t=33/365:
[tex]1000=966.16(1+r(\frac{33}{365}))[/tex]Solve the equation for r:
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