Question
In: Math
Price of T-Bill
What is the price of a T-Bill 98 days prior to maturity if the face amount is 100 and the yield (the simple interest rate) is 2.7% per annum.
Solutions
Expert Solution
The general way to find the present value of the face amount requires the rate of interest which is given to be 2.7% per annum simple interest. But the T-bill is for 98 days not a full year so the interest rate becomes 2.7% * (98/365). Then to find the present value:
The question essentially asks for the present value of the face amount: 100.725
nicha answered 2 years agoRelated Solutions
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