1. What is the US Treasury Rate?

The US Treasury Rate represents the annualized return on investment for US Treasury securities. It's calculated based on the difference between the face value and purchase price of the security, adjusted for the time to maturity.

2. How Does the Calculator Work?

The calculator uses the Treasury Rate formula:

Where:

• \( Face\ Value \) — The amount paid at maturity (USD)
• \( Purchase\ Price \) — The price paid for the security (USD)
• \( Days\ to\ Maturity \) — The number of days until maturity

Explanation: The formula calculates the annualized return by considering both the price discount and the time value of money.

3. Importance of Treasury Rate Calculation

Details: Calculating the Treasury Rate helps investors compare different Treasury securities, assess investment returns, and make informed decisions about fixed-income investments.

4. Using the Calculator

Tips: Enter the face value and purchase price in USD, and the days to maturity. All values must be positive numbers (days to maturity must be at least 1).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between Treasury Rate and Yield?
A: The Treasury Rate is a simple annualized return calculation, while Yield to Maturity considers compounding and is generally more precise.

Q2: What are typical Treasury Rate ranges?
A: Rates vary with market conditions but typically range from 0.5% to 5% for short-term Treasury bills.

Q3: Why use 365 days in the formula?
A: This standardizes the calculation to an annual basis, regardless of the actual days in the year.

Q4: Can this calculator be used for other fixed-income securities?
A: While the formula is similar, other securities may have different conventions for calculating rates.

Q5: How does this relate to bond prices?
A: The calculator shows the inverse relationship between price and yield - when prices fall, rates rise, and vice versa.