1. What is T-Bill Return?

The T-Bill return represents the percentage gain earned on a Treasury bill investment. It's calculated based on the difference between the face value (what you receive at maturity) and the purchase price (what you paid).

2. How Does the Calculator Work?

The calculator uses the T-Bill return formula:

Where:

• \( Face\ Value \) — The amount received at maturity (in dollars)
• \( Purchase\ Price \) — The price paid for the T-Bill (in dollars)

Explanation: The formula calculates the percentage return based on the discount from face value.

3. Importance of T-Bill Return Calculation

Details: Calculating T-Bill returns helps investors compare different T-Bill investments and assess their performance relative to other investment options.

4. Using the Calculator

Tips: Enter both face value and purchase price in dollars. The purchase price must be less than the face value (as T-Bills are sold at a discount).

5. Frequently Asked Questions (FAQ)

Q1: What is a typical T-Bill return?
A: Returns vary based on maturity and market conditions, typically ranging from 1-5% for standard maturities.

Q2: How does this differ from annualized return?
A: This calculates the simple return. Annualized return accounts for the investment period.

Q3: Are T-Bill returns taxable?
A: Yes, the difference between purchase price and face value is subject to federal income tax.

Q4: What's the minimum investment for T-Bills?
A: The minimum is typically $100 for most Treasury bills.

Q5: Where can I buy T-Bills?
A: Directly from TreasuryDirect.gov or through banks and brokers.