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A 182 - day government bill, redeemable at $100, was purchased for $96 at the...

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Finance

A 182 - day government bill, redeemable at $100, was purchased for $96 at the time of issue and was later sold to another investor for $97.89 (a government bill is a zero-coupon bond). The rate of return received by the initial purchaser was 5% per annum effective

(a) Calculate the length of time in days for which the initial purchaser held the bill.

(b) Calculate the annual simple rate of return achieved by the second investor.

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