Question

You purchase a 189-day, $1000 U.S. Treasury bill at 4.19% discount. On the date of maturity, you will receive $1000. How much interest does the U.S. Government pay to you on the date of maturity?

Answer 1

Answer:

The government paid an interest of $41.9, which is 4.19%

Step-by-step explanation:

Given the 189-day, $1,000 U.S Treasury bill is purchased at a discount of 4.19%, this means that:

It was purchased at a discount of:

4.19% of $1000

= (4.19/100) × 1000

= $41.9

Purchase price = $1000 - $41.9 = $958.1

Because the treasure is sold for $1000 on maturity day, that means the government paid an interest of $41.9, which is 4.19%