4. Roy Nelson paid $ \$ 9,600 $ for a T-bill with a par value of $ \$ 10,000 $. How much will Roy earn the Tbill to maturity?

Question

asked Dec 23, 2024 141k views

1 Answer

Yiyang · Answer 1 · 2024-12-27T03:31:10+0000

Answer: Roy will earn $400 on the T-bill at maturity

Step-by-step explanation:

To calculate how much Roy will earn on the T-bill at maturity, we need to determine the interest or discount earned on the bill.

The formula to calculate the interest earned on a T-bill is:

Interest = Par value - Purchase price

In this case, the par value of the T-bill is $10,000, and Roy paid $9,600 for it.

Interest = $10,000 - $9,600

Interest = $400