Treasury Bills Are Sold on an Add-On Basis, with Interest

question 14

True/False

Treasury bills are sold on an add-on basis, with interest paid separately at maturity.

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Definitions:

Ordinary Interest

Interest calculated based on a 360-day year, typically used in banking and finance for loans and savings.

Total Amount

The aggregate or final sum of various components, such as the total cost, payment, or investment value.

Exact Interest

A method of calculating interest based on a 365 or 360-day year, often used in banking and finance to determine the amount due on loans or investments.

365-Day Year

A convention used in interest calculations assuming a full year consists of 365 days.