If the annual interest rate is 5% (.05), the price of a one-year Treasury bill per $100 of face value would be:

Question

Quizplus · Accepted Answer

The price of a one-year Treasury bill is calculated using the formula:
Price = Face Value / (1 + Annual Interest Rate x Time)
where the Face Value is $100, the Annual Interest Rate is 5% or 0.05, and the Time is 1 year. Plugging in the values, we get:
Price = $100 / (1 + 0.05 x 1) = $95.24
Therefore, the best choice is C.

If the Annual Interest Rate Is 5%