Problem:
Steve purchased a bond for $975.00. Ninety days later he received interest income of $40.00, and then immediately sold the bond for $990.00.
Required:
Question: What is the annualized rate of return Steve earned on this investment?
a. 10.1%
b. 5.6%
c. 22.6%
d. 12.3%
e. 16.4%
Note: Show all workings.