SUBMIT ANSWER [-/10 Points] DETAILS MY NOTES AUFQR2 4.1.027. An investor purchases a T-bill with a face value (maturity value) of \( \$ 1,000 \) for \( \$ 986 \). If the term of the T-bill is 8 months, what is the annual simple interest rate (in percent)? Round to the nearest tenth of a percent. Peed Help? Readit

To find the annual simple interest rate, we first need to calculate the interest earned from the T-bill. The interest is equal to the face value minus the purchase price: \[ \text{Interest} = \$ 1,000 - \$ 986 = \$ 14 \] Next, we convert the 8-month term into a fraction of a year, which is \( \frac{8}{12} = \frac{2}{3} \) years. The formula for calculating the simple interest rate is: \[ \text{Interest Rate} = \left( \frac{\text{Interest}}{\text{Principal} \times \text{Time}} \right) \times 100 \] Plugging in the values: \[ \text{Interest Rate} = \left( \frac{14}{986 \times \frac{2}{3}} \right) \times 100 = \left( \frac{14}{657.33} \right) \times 100 \approx 2.13\% \] To find the annual rate, we then account for the full year, so: \[ \text{Annual Interest Rate} = 2.13\% \times \frac{12}{8} = 3.195\% \approx 3.2\% \] Therefore, the annual simple interest rate is approximately **3.2%**.