Q.A 91-day Treasury Bill of face value ₹100 is issued at a discount price of ₹98. Calculate

A Treasury Bill earns its return purely through the gap between its discounted issue price and its full face value at maturity — there is no separate interest payment. …

Step 1 — Find the amount of discount.

The discount is simply the difference between the face value and the issue (purchase) price.

Step 2 — Find the annualised discount yield.

Since the bill runs for only 91 days, the ₹2 return earned over that period must be scaled up to a full-year (365-day) basis to compare it fairly with other annual rates of return. The standard formula is:

$\text{Annualised Yield} = \dfrac{\text{Discount}}{\text{Issue Price}} \times \dfrac{365}{\text{Days to Maturity}} \times 100$ …

Cross-check by working backward. If ₹98 invested earns an annualised yield of 8.20% over 91 days, the return earned in that period should be: 98 x 0.0820 x (91/365) ≈ ₹2.00, which mat …

Reporting the simple return of ₹2 on ₹98 (about 2.04%) as if it were the annual yield, without scaling it up by the 365/91 factor for the bill's actual 91-day holding period …