N. Trest bought a $10,000 Treasury bill at a 18% discount for 13 weeks (91 days). How much does N pay for the bond?
A) $10,000
B) $9551.23
C) $8,732.73
D) $8,548.95

Question

Quizplus · Accepted Answer

The discount is 18% of $10,000, which is $1,800. The price paid is $10,000 - $1,800 = $8,200. However, the bond is for 13 weeks, which is less than 6 months. Therefore, the interest is calculated on a 6-month basis, which is $10,000 x 18% x 6/12 = $900. The total amount paid is $8,200 + $900 = $9,100.

N Trest Bought a $10,000 Treasury Bill at a 18