TREASURY BILLS
► These
are government
securities
► It matures in less than a year
within 91 days, 182 and 364
days
COMPUTATION OF TREASURY BILLS
►
►
PP = PURCHASE PRICE
FACE VALUE x 360___
360 + (RATE x Term)
Examples
► Treasury
Bills Ps 450,000.00 for
91, 182, and 364 days was
bought by a bank at 7.90%,
11.25%, 6.75% and sold to an
investors at the rates of 6.50%
13.50% and 4.35%
CALCULATE FOR THE PURCHASE PRICE
AND DISCOUNTS
► Discounts
►
are computed:
Discount = Face Value – Purchase Price
Eligible Dealer and Investors are
computed using different rates
►
Eligible Dealer – carries the higher
rate and lower rates for the
investor.
PP1 = for the dealer
►
►
Another Formula for PP1 and PP2
Dealer PP1 = FV/(1+ rate x time)
► Where time is always divided by
360days D1 is also computed
PP2 2ns Formula for the Investor
►
PP2 = FV/(1 + (rate x time)
►
Where time is always divided by
360 days and D2 is also computed