00:01
What is the discount amount for three -month bills? our discount amount, which we'll call a, is equal to our face value times our discount rate times our days to maturity divided by 360.
00:17
So we're giving this information.
00:19
Our face value is 10 ,000 times our discount rate, which is 0 .0 .6 .5.
00:28
Our days to maturity is three months, which is approximately 90 days.
00:32
And then divide by 360.
00:36
So calculating this, our discount amount is $90 .13 per $10 ,000 in denomination.
00:46
Now what about our discount amount for six -month bills? now we use our 10 ,000 face value times our rate, which is 0 .0355, times our days to maturity, which is six months or 180 days, divide by 360.
01:06
We get 17750.
01:11
And now we'd like to find our effective rate for part c...