A Financial Institution Pays a Simple Interest Rate of 6

question 264

Short Answer

A financial institution pays a simple interest rate of 6.7% on 30 to 179-day GICs of at least $100,000. What is the effective annualized rate of return:
a) On a 40-day GIC?
b) On a 160-day GIC?

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Definitions:

Private Facts

Information about a person that is not public knowledge and that the individual has chosen to keep private; disclosure of such information may lead to legal consequences.

Absolute

Unconditional; complete and without restrictions or limitations.

Conditional

Subject to one or more conditions or requirements being met; not absolute.

Constitutional Privilege

A right or immunity granted under the constitution that provides protection to individuals against certain government actions.