Explanation:
We know that:
P=360n(100βY)P = \frac{360}{n}(100 - Y)P=n360β(100βY)
Where PPP is the quoted price, and YYY is the corresponding cash price per USD 100 of face value.
We can make YYY the subject of the formula so that:
Y=100βPn360=100β5.5Γ230360=96.4861Y = 100 - \frac{Pn}{360} = 100 - \frac{5.5 \times 230}{360} = 96.4861Y=100β360Pnβ=100β3605.5Γ230β=96.4861
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Q.4921 Suppose a Treasury bill lasts for 230 days and has a quoted price of 5.5. What is the cash price of the Treasury bill?
A
91.2717
B
96.4861
C
96.5342
D
91.3913
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