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

The U.S. Government pays $958.1 in interest on the date of maturity.

Step-by-step explanation:

To calculate the interest paid on the U.S. Treasury bill, you need to find the discount amount and subtract it from the face value. The discount amount is found by multiplying the face value ($1000) by the discount rate (4.19%).

Discount amount = $1000 * 0.0419 = $41.9

The interest paid on the date of maturity is the face value ($1000) minus the discount amount ($41.9), which equals $958.1.