31
Jan
Jan
1.) A bank wants to earn 6% simple discount on a 90-day $2,000,000 treasury bill. How much should it pay?
2.) A bank paid $2,962,230 for a 30-day $3 million treasury bill. What was the simple discount rate?
Answer:
Interest rate (simple) - is the rate, or percent, stated on an annual (or yearly) basis.
If time is given in days, ordinary or exact interest must be specified.
Exact
1) 2000000/(1 .06*90/365) =1970842.33
2) (3000000/2962230 -1)*100*365/30=15.51%
ordinary
2000000/(1 .06*90/360)= $1970443.35
(3000000/2962230 -1)*100*365/30= 15.30%
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on Thursday, January 31st, 2008 at 11:46 pm and is filed under Personal Finance.
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