The U.S. Treasury bill is currently selling at a discount basis of 4.25%. The par value of the bill is $100,000, and will mature in ninety days. What is the price of this Treasury bill?

Question

Quizplus · Accepted Answer

The price of a Treasury bill is calculated using the formula: Price = Par Value - (Discount Rate * Par Value * (Days to Maturity / 360)). Substituting the given values: Price = $100,000 - (0.0425 * $100,000 * (90 / 360)) = $98,937.50.

The US Treasury Bill Is Currently Selling at a Discount Basis