How much would you pay for a U.S. Treasury bill with 71 days to maturity quoted

Question

How much would you pay for a U.S. Treasury bill with 71 days to maturity quoted at a discount yield of 2.28 percent? Assume a $1 million face value. (Do not round intermediate calculations. Round your answer to 2 decimal places. Enter your answer in dollars not in millions. Omit the "$" sign in your response.)

I know the answer is not $994,477.78

How much would you pay for a U.S. Treasury bill with 71 days to maturity quoted at a discount yield of 2.28 percent? Assume a $1 million face value. (Do not round intermediate calculations. Round your answer to 2 decimal places. Enter your answer in dollars not in millions. Omit the "$" sign in your response.)

Explanation / Answer

Step 1 : Discount yield for 71 days = 2.28 *71/ 360

                                                      = .4497%

step 2 :Present value od Tresury bill = Face value /(1+ Rate)

                                                    = 1,000,000 / (1+ .004497)

                                                   = 1,000,000 / 1.004497

                                                   = $ 995,523.13

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