Asked by Carol Green on May 30, 2024
Verified
The purchaser of a 168-day T-bill with a face value of $100,000 paid $98,929.92 for it. After 50 days, interest rates had increased and she sold the T-bill at 2.85% simple interest. What price did she receive for the T-bill?
T-Bill
Short for Treasury Bill, a short-term government securities issued with a maturity of less than one year, considered a safe investment.
Interest Rates
They are the charges lenders impose on borrowers for the use of financial assets, restated here to highlight their critical role in finance and borrowing.
Simple Interest
Interest is calculated merely on the principal or on what part of the principal is still owed.
- Evaluate and investigate the yields of investments through different time frames, including those in T-bills and commercial paper.
- Gain insight into how fluctuations in interest rates influence the financial gains from selling investments before they mature.
Verified Answer
Learning Objectives
- Evaluate and investigate the yields of investments through different time frames, including those in T-bills and commercial paper.
- Gain insight into how fluctuations in interest rates influence the financial gains from selling investments before they mature.
Related questions
Jake Purchased a $100,000 182-Day T-Bill Discounted to Yield 5 ...
A $100,000, 91-Day Province of Ontario T-Bill Was Purchased for ...
The Purchaser of a 168-Day T-Bill with a Face Value ...
Lydia Purchased a $100,000 150-Day T-Bill When the Prevailing Yield ...
The Purchaser of a 168 Day T-Bill with a Face ...