A company issued Commercial Paper (CP) having a face value of ₹ 5 lakh for 90 days maturity at the interest rate of 10% of issue price. Calculate its issue price.

Calculation of Issue Price of CP Given: Face Value (FV) of CP: ₹ 5,00,000. Rate of Interest (ROI): 10% Period: 90 Days Issue Price (IP): To calculate Formula for calculation of Issue Price The issue price of the CP at a discount of face value and on maturity of the deposit, the face value of the CP is paid to the investor. The issue price of CP is calculated as under: Issue Price/Discounted Value = (36,500 * FV) / (36,500 + (Number of Days * ROI)) Issue Price = (36,500 * 5,00,000) / (36,500 + (90 * 10)) IP = (18,250,000,000) / (36,500 + 900) IP = (18,250,000,000) / 37,400 IP = 4,87,967.91 Rounded off to ₹ 4,87,968 Hence the Issue Price/Discounted Value of the CP is ₹ 4,87,968.