Answer:
$9,813.54
Explanation:
The face value of the T-bill is $10,000
Return of 1.9%
P= $10,000/1.019
= $9,813.54
Therefore the price you would expect a 6-month maturity Treasury bill to sell for is
$9,813.54 because The face value of the T-bill is $10,000 and the investors can earn a return of 1.9% per 6 months on a Treasury note with 6 months remaining until maturity leading to increase in the return of 1.9% because 1.9% will give us 0.019 plus increase of 1 which will give us 1.019.
<span>It should be laid out like this example:(November 10, 2015)</span>
Wizard Man info? Count me in! I'll be sure to give you a follow. ;)
Given:
P = $10,000, the principal
t = 40 yers, time duration
r = 8% = 0.08, the interest rate
Assume that
n = 12, monthly compounding.
The value after 40 years is

nt = 12*40 = 480
1 + r/n = 1 + 0.08/12 = 1.0066667
A = 10000*1.0066667⁴⁸⁰ = $242,737.71
Answer: $242,737.71