Quantitative Finance
# Introduction to Fixed Income

A Treasury bill is one of the safest investments in the bond market.

Alex invested $1000 at 10% annual interest, compounded annually.

Brian invested $2000 at 5% annual interest, compounded annually.

After 2 years, how much more interest did Alex earn than Brian?

RAC is offering a Presidents Day (US holiday) special on a Samsung Galaxy.

You can choose between 2 payment plans:

1) 78 weekly worry-free payments of $29.99 each week, starting today.

2) A one-time payment of $829.00 due in 90 days.

Assuming that you want to buy this phone, what is the minimum (positive) **daily** interest rate that would make a person be indifferent between these payment plans?

If your former high school math teacher opens a bank and loans you $1000 at 10% monthly interest (compounded monthly), which of the following is the closest to the amount that you would owe after a year?