MHB Effective Rate of Interest

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The discussion focuses on calculating the effective rate of interest for a $17,000 T-bill purchased at a 2.75% discount rate for 20 weeks. The formula E = [1 + (r/m)]^m - 1 is proposed for this calculation, with r set as 0.0275 and m as 5/13. Participants question whether the discount rate is equivalent to the interest rate and seek clarification on the definitions. There is uncertainty about the correctness of the values for r and m. The conversation emphasizes the need for accurate definitions and formula application in financial calculations.
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A $17,000 T-bill is purchased at a 2.75% discount rate for 20 weeks. Find the effective rate of interest to the nearest hundredth of a percent.

My Effort:

Note: 20 weeks = 20/52 or 5/13 of a year.

Let E = effective rate of interest

E = [1 + (r/m)]^m - 1 where r is the nominal (annual ) advertised rate; m is the number of compounding periods/year.

Let r = 0.0275

Let m = 5/13

1. Is this the correct formula?

2. If so, is my value for r and m correct?
 
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Are you SURE a "Discount" rate is the same as an "Interest" rate? Look up the definitions and make sure.
 
I'll have to get back to you.
 
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