You bought $150 000 in 364-day T-bills. The T-bills were discounted at a rate of 4.432%. If you paid $148 811.24 for the T-bills, how many days before maturity did you buy it?
A) 6.527 days
B) 605.27 days
C) 56.27 days
D) 52.67 days
E) 65.79 days

Question

Quizplus · Accepted Answer

The discount amount is $150,000 - $148,811.24 = $1,188.76. The annual discount rate is 4.432%, so the daily rate is 4.432% / 364. Using the formula for the number of days: (Discount Amount / (Face Value * Daily Rate)), we get approximately 65.79 days.

You Bought $150 000 in 364-Day T-Bills