The discount rate on a T-Bill is always a simple annual interest rate, using the formula, D= PVrt where D is discount, PV is present value, r is rate and t is time years. The maturity times and discount rates for $20,000 T-bills sold on July 8, 2019, are given. Find the discount amount and the price of each T- bill. (a) one year; 0.52% (b) six months; 0.35% (c) three months: 0.26%
The discount rate on a T-Bill is always a simple annual interest rate, using the formula, D= PVrt where D is discount, PV is present value, r is rate and t is time years. The maturity times and discount rates for $20,000 T-bills sold on July 8, 2019, are given. Find the discount amount and the price of each T- bill. (a) one year; 0.52% (b) six months; 0.35% (c) three months: 0.26%
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 7P
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