R3M Debenture: Issue and Trading Details for Reserve Bank Nominal Value

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The R3M Debenture has a nominal value of R3,000,000, issued on January 1, 2006, with an expiry date of June 30, 2006, and an interest rate of 9.25%. As of February 25, 2006, the trading interest rate is 8.50%. The discussion emphasizes that understanding the terms and basic formulas related to finance is crucial, and the math involved is primarily arithmetic rather than complex calculations. There is a distinction made between the fields of economics and accountancy, with a lighthearted note on income differences between professions. The conversation highlights the importance of financial literacy in assessing secondary market considerations.
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Nominal Value: R3 000 000
Issue Date: 1 January 2006
Expiry Date: 30 June 2006
Interest Rate: 9,25%

On 25 February this instrument trades at an interest of 8,50%. The number of days from 1 Jan 2006 to 25 February is 55 days, from 25 February to 30 June is 125 days and from 1 Jan 2006 to 30 June 2006 there are 180 days. What is the consideration in the secondary market?
PLEASE HELP!
 
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This is NOT a mathematics problem! Once you know the definitions of all those terms, and the basic formulas, which are really Economics, the only math involved is arithmetic.
 
Thanks!
 
HallsofIvy said:
This is NOT a mathematics problem! Once you know the definitions of all those terms, and the basic formulas, which are really Economics, the only math involved is arithmetic.

Don't foist that onto economists, who do use real math (though not as much as mathematicians, of course). This is a problem of finance or accountancy, which use no more than basic arithmetic.
 
Sorry, I didn't mean to offend economist!

On the other hand, my brother is an accountant and makes four times as much as I do.
 

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