The difference between the purchase price of a treasury bill and the amount that is paid at maturity is the interest earned on the bill.

Question

Quizplus · Accepted Answer

The interest earned on a Treasury bill (T-bill) is indeed the difference between the purchase price and the amount paid to the holder at its maturity. T-bills are sold at a discount to their face value, and the investor earns the interest when the bill matures at its face value.

The Difference Between the Purchase Price of a Treasury Bill