Sixty-day commercial paper with face value $100,000 was issued by a company for $98,890.25. What simple interest rate of return will be realized if the investment is held until maturity?

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for financing payroll, accounts payable, and inventories.

Simple Interest

Interest that is computed solely on the initial sum invested or loaned, not taking into account any accumulated interest from previous periods.

Face Value

The nominal or dollar value printed on a security or financial instrument, representing its value upon maturity or redemption.

Utilize the fundamentals of investing in money markets, focusing on yield rates and discount applications.
Measure and analyze the financial outcomes of investments across several periods, especially in T-bills and commercial paper.

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Learning Objectives

Utilize the fundamentals of investing in money markets, focusing on yield rates and discount applications.
Measure and analyze the financial outcomes of investments across several periods, especially in T-bills and commercial paper.