Treasury bill with face value of $100,000 and maturity of 3 months sells for $99,000. a. What

Question:

Treasury bill with face value of $100,000 and maturity of 3 months sells for $99,000.

a. What would be the rate quoted on this bill on a discount basis?

b. What would be its effective annual interest rate?

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...