Question

YOU WANT TO BUY A TREASURY BILL WHOSE FACE VALUE IS $20000 IN 30 DAYS. THE INTEREST RATE IS 4.61%. HOW MUCH WILL YOU HAVE TO PAY FOR THE BILL?

Answer 1

P = Po + P*r*t = 20,000
Po + Po*(0.0461/360)*30 = 20000
Po + 0.0038417Po = 20000
1.0038417Po = 20000
Po = $19,923.46 = Amt. paid.