Final answer:
To determine the annual percentage rate of return for a Treasury bill purchased at $810 and maturing to $1000 in 5 months, calculate the profit, annualize the return, and then find the percentage based on the investment amount. The APR is approximately 56.30%.
Step-by-step explanation:
The question asks to determine the annual percentage rate of return on a Treasury bill. To find this, we can calculate the return and annualize it. The investor pays $810 for a Treasury bill with a par value of $1000 maturing in 5 months. The profit is the difference between the purchase price and the par value, which is $1000 - $810 = $190. Next, we need to annualize this return. Since there are 12 months in a year and the bill matures in 5 months, we calculate the annual return as follows:
(Annual Return) = (Return for 5 months) × (12 / 5)
Using the profit values: (Annual Return) = ($190) × (12 / 5) = $456
The annualized return is $456 on an investment of $810, so the annual percentage rate of return (APR) is:
APR = ($456 / $810) × 100% ≈ 56.30%
Therefore, the annual percentage rate of return for this investment is approximately 56.30%.