A 1-month (30-day) USCP with a face value of USD 5 million is quoted at a rate of discount of 2.31%. How much is the paper worth?
A) USD 4,884,500.00
B) USD 4,990,375.00
C) USD 4,990.506.85
D) USD 4,990,393.49

Question

Quizplus · Accepted Answer

The value of the paper is calculated using the formula: Face Value - (Face Value * Discount Rate * (Days to Maturity/360)). Substituting the given values: 5,000,000 - (5,000,000 * 0.0231 * (30/360)) = 4,990,375.00.

A 1-Month (30-Day) USCP with a Face Value of USD