Cryptocurrency Q&A
How much does a $1000 T-bill cost?
How much does a $1000 T-bill cost?
EchoSeeker
Wed Sep 04 2024
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5 answers
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Excuse me, I was wondering if you could clarify something for me. The paragraph mentions a T-bill with a value of $1000, but I'm a bit confused about the actual cost involved. When purchasing a T-bill of this amount, is the cost exactly $1000, or is there some sort of premium or discount applied to the face value? Essentially, what I'm asking is, how much money would I need to invest initially to acquire a $1000 T-bill?
5 answers
CryptoQueen
Fri Sep 06 2024
Recognizing that the Treasury bill in question is for $1,000 rather than $100, we adjust the discount rate accordingly. By multiplying 99.25 by 10, we account for the higher denomination.
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SamsungShineBrightness
Fri Sep 06 2024
To determine the price of a $1,000 Treasury bill, we begin by calculating a key factor based on a 180-day period. By multiplying 180 by 1.5, we arrive at 270. This intermediate result is crucial for the subsequent steps.
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CryptoKing
Fri Sep 06 2024
Performing this multiplication yields the final price that the investor must pay for the $1,000 Treasury bill. The calculation results in $992.50, reflecting the discounted price based on the determined discount rate.
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DaeguDivaDanceQueenElegance
Fri Sep 06 2024
Following the initial calculation, we divide 270 by 360 to obtain a decimal value of 0.75. This step represents a normalization process, ensuring consistency in our price determination.
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Marco
Fri Sep 06 2024
With the decimal value at hand, we proceed to find the discount rate by subtracting 0.75 from 100. The result, 99.25, signifies the percentage of the face value that the investor will receive upon maturity.
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