SOLUTION: What is the purchase of a 50-day T-bill with a maturity value of $1,119 that earns an annual interest rate of 4.627% Assume a 360 day-year The purchase price is $. Round to t

Question 1182565: What is the purchase of a 50-day T-bill with a maturity value of $1,119 that earns an annual interest rate of 4.627% Assume a 360 day-year

The purchase price is $. Round to two decimal places.
Answer by CPhill(1987) (Show Source): You can put this solution on YOUR website!
Here's how to calculate the purchase price of the T-bill:
1. **Calculate the interest earned on the T-bill:**
* Interest = Maturity Value * Annual Interest Rate * (Days to Maturity / Days in Year)
* Interest = $1,119 * 0.04627 * (50 / 360)
* Interest ≈ $7.19
2. **Calculate the purchase price:**
* Purchase Price = Maturity Value - Interest
* Purchase Price = $1,119 - $7.19
* Purchase Price ≈ $1,111.81
Therefore, the purchase price of the 50-day T-bill is approximately $\boxed{1111.81}$.

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