Question
A 128-day, $100,000 T-bill was initially issued at a price that would yield the buyer 1.19%. If the yield required by the market remains at
A 128-day, $100,000 T-bill was initially issued at a price that would yield the buyer 1.19%. If the yield required by the market remains at 3.19%. If the T-bill was sold to earn 1.75% twenty days prior to maturity, how much money in interest did the initial owner earn? My initial workings start as:
100000/(1+.0119)^128/365
I've tried this every which way that I can manage, tried multiple different calculators, entered in different ways, etc and cannot figure out how others & my instructor got (1+.0119)^128/365 to equal approx 1.0080673.
I've gotten 1.211408925, 1.004157133 & 0.012454343 but never 1.0080673. What am I doing wrong here? I can't manage to figure it out and this issue is causing wrong answers for a lot of questions!!
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