The given Treasury bill was sold in April of this year. Find (i) the price of the T-bill, and (ii) the actual interest rate paid by the Treasury. Round dollar amounts to the nearest cent and interest rates to the nearest thousandth.
-Six-month $\$ 12,000 \mathrm{~T}$-bill with discount rate $0.110 \%$
A) (i) $\$ 12,006.60$;
B) (i) $\$ 11,999.34$;
(ii) About $0.11 \%$
(ii) About $0.011 \%$
C) (i) $\$ 11,993.40$;
D) (i) $\$ 11,992.08$;
(ii) About $0.11 \%$
(ii) About $0.132 \%$

Question

Quizplus · Accepted Answer

The price of the T-bill is calculated using the formula: Price = Face Value - (Face Value * Discount Rate * (Days to Maturity/360)). For a six-month T-bill, Days to Maturity is approximately 180. Thus, Price = 12000 - (12000 * 0.00110 * (180/360)) = \$11,993.40. The actual interest rate is calculated as (Discount/Price) * (360/Days to Maturity), which is approximately 0.132%.

The Given Treasury Bill Was Sold in April of This $12,000 T\$ 12,000 \mathrm{~T}$12,000 T

The Given Treasury Bill Was Sold in April of This $\$ 12,000 \mathrm{~T}$