A bank bill with a face value of $100,000 was issued today and it matures in 60 days' time. If interest rates are 6% p.a. what amount of interest is earned if the bill is held until maturity? Group of answer choices $6,000.00 $1,457.88 $976.67 $78,260.87 $99,023.33
Question
A bank bill with a face value of $100,000 was issued today and it matures in 60 days' time. If interest rates are 6% p.a. what amount of interest is earned if the bill is held until maturity?
Group of answer choices
$6,000.00
$1,457.88
$976.67
$78,260.87
$99,023.33
Solution
To calculate the interest earned on a bank bill, you can use the formula:
Interest = (Face Value x Interest Rate x Time) / 365
Here, the face value is $100,000, the interest rate is 6% (or 0.06 when expressed as a decimal), and the time is 60 days.
So, the calculation would be:
Interest = ($100,000 x 0.06 x 60) / 365
This gives us an interest amount of approximately 976.67. Therefore, $976.67 is the best choice from the given options.
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