If I buy a 3 month US Bond (or note) at $1000, and it's rate is 4.5, does this mean that after three months I get back my initial $1000 plus $45?
2007-06-13 12:25:41 · 3 answers · asked by a_knight1 1 in Business & Finance ➔ Personal Finance
4.5% is the annual rate. 3 months interest would be $11.25 (1/4 the annual amount). you would receive $1011.25 at the end of the 3 months.
Note to: Stephanie N: There is no such thing as a 3 month Treasury note with a floating rate. Rates don't adjust more often than that.
2007-06-13 13:06:50 · answer #1 · answered by STEVEN F 7 · 1⤊ 0⤋
Yes
2007-06-13 12:32:46 · answer #2 · answered by lavell 3 · 0⤊ 0⤋
It will depend if the rate is fixed or floating. If it is fixed, then yes. If it is floating and changes constantly, then no.
2007-06-13 12:34:20 · answer #3 · answered by Stephanie N 2 · 0⤊ 1⤋