1. You own three 180-day discount instruments, each of which has a face value
of $500,000. You plan to sell one every 30 days to fund monthly expenditures of
$490,000 associated with the start-up phase of a capital project. Specifically, you plan
to sell one instrument when there is 150 days to run to maturity, another instrument
when there is 120 days to run to maturity and the final instrument when there is 90
days to run to maturity.
- Describe the nature of the discount instrument and the associated present value
Basically I don't rly understand the formula for this, any starting help or something would help... thanks!