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Mr B has purchased treasury bills of fac...

Mr B has purchased treasury bills of face value of Rs. 1,00,000 at Rs. 96,000. At the time of maturity , he will get Rs. 1,00,000. How much interest is received by him?

A

(a) Rs. 10,000

B

(b) Rs.4,000

C

(c) Nil

D

(d) None of these

Text Solution

Verified by Experts

The correct Answer is:
B
Treasury bills are issued at discount and repaid at par. The difference between the issue price and the face value is called as interest. Mr B has purchased treasury bills at Rs. 96,000 whose , he will be repaid at par, i.e. Rs. 1,00,000. Therefore, interest = 1,00,000-96,000 = Rs. 4,000.
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