A 90-day bank bill that promises to pay $300,000 at its maturity was issued 56 days ago. Calculate its price today if it is traded at a simple interest yield of 4.4% p.a. Assume one year has 365 days.(Round your answer in dollars to 2 decimal places)

To calculate the price of the bank bill today, we can use the formula for the price of a bill traded at a simple interest yield:

\[
\text{Price} = \frac{\text{Face Value}}{1 + \left(\frac{r \times t}{365}\right)}
\]

Where:
- $\text{Face Value} = 300,000$ (the amount to be paid at maturity)
- $r = 4.4\%$ or $0.044$ (the annual interest rate)
- $t = 34$ (the remaining days to maturity, calculated as $90 - 56$)

Now, let's plug in the values and calculate the price:

\[
\text{Price} = \frac{300,000}{1 + \left(\frac{0.044 \times 34}{365}\right)}
\]

First, calculate the interest factor:

\[
\frac{0.044 \times 34}{365} = 0.00409452
\]

Then, add 1 to the interest factor:

\[
1 + 0.00409452 = 1.00409452
\]

Now calculate the price:

\[
\text{Price} = \frac{300,000}{1.00409452} = 298,774.71
\]

Thus, the price of the bank bill today is **$298,774.71**.

Do you want further details or have any questions?

Here are 5 related questions to consider:
1. What happens to the price if the interest rate increases?
2. How would the price change if the bill had been issued 80 days ago?
3. What is the formula for calculating the price with compound interest instead of simple interest?
4. How is the interest rate yield affected by the length of the bill's term?
5. How does changing the face value affect the price of the bill?

**Tip**: Always check if the interest rate is compounded or simple, as it can significantly impact the final result.

A 90-day bank bill that promises to pay $300,000 at its maturity was issued 56 days ago. Calculate its price today if it is traded at a simple interest yield of 4.4% p.a. Assume one year has 365 days. (Round your answer in dollars to 2 decimal places)

Learn how to calculate the price of a 90-day bank bill traded at 4.4% simple interest yield, using the face value of $300,000. This finance problem covers discounting bills with simple interest. Suitable for Grades 10-12 or college-level students.

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