Asked by Hailee Ramirez on Jun 07, 2024
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A money market mutual fund purchased $1 million face value of Honda Canada Finance Inc. 90-day commercial paper 28 days after its issue. What price was paid if the paper was discounted at 2.10% simple interest?
Commercial Paper
An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.
Simple Interest
Interest calculated only on the principal amount, or on that portion of the principal amount that remains unpaid.
Honda Canada Finance
The financial service arm of Honda in Canada, offering financing options for purchasing Honda vehicles, including loans and leases.
- Attain knowledge on how to calculate and apply simple interest in diverse economic environments.
- Acquire an understanding of how to calculate return on investment (ROI) in short-term financial vehicles.
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Learning Objectives
- Attain knowledge on how to calculate and apply simple interest in diverse economic environments.
- Acquire an understanding of how to calculate return on investment (ROI) in short-term financial vehicles.
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