Question

What is the yield to maturity on a​ one-year, $1,000 Treasury bill with a current price of​ $900?

Answer 1

So yield to maturity will be 11.1 %

Step-by-step explanation:

We have given final value FV = $1000

Current price = $900

Time is given t = 1 year

We have to find the rate of interest

Future value is given by

`A=P(1+(r)/(100))^n`, here A is future value and P is current price

So
`1000=900(1+(r)/(100))^1`

`1.111=1+0.01r`

`0.111=0.01r`

r = 11.1 %