TBillLab — official notice
How T-Bill Yields Are Calculated
Every calculator on TBillLab reduces to a handful of formulas that have not changed in generations. This page writes them out, works each one by hand on the same sample bill, and states the editorial rules the site follows — so any result here can be checked with a pencil.
The pricing identity
A bill is priced by discounting face value over the holding period: price equals face value divided by one plus the yield times days over 365. The identity runs both directions — given price, solve for yield; given a target yield, solve for price. The yield and price calculators are the same equation read from opposite ends.
Bank discount yield (BDY)
BDY equals the discount divided by face value, multiplied by 360 over days. On the running sample — $1,000 face at $996.72 for 91 days — the discount is $3.28 and BDY works out to about 1.30% when rounded. The convention divides by the larger number and a shorter year, which is why it reads low.
Bond equivalent yield (BEY)
BEY equals the discount divided by the price paid, multiplied by 365 over days. The same sample gives roughly 1.32%. The two figures differ by construction, not by forecast; the dual-scale cards on the yield pages exist to make that construction visible at a glance.
Rolling and laddering
The reinvestment page multiplies the per-cycle discount by the number of cycles and divides total profit by money and time for the blended rate. The ladder page divides total face into equal rungs and spaces their maturities evenly across the longest run. Both are arrangements of the same pricing identity — no additional assumptions enter.
Editorial rules and sources
The site deliberately publishes no market levels: every number on a result card comes from your inputs, and worked examples state their assumptions inline. Definitions follow the standard treatments of discount securities found in public references such as the U.S. Treasury's educational materials at TreasuryDirect and any standard investments text. Pages are reviewed by the TBillLab editors, and corrections are invited on the contact page.
Data version
Formula set version: 1.0 — the constants 360 and 365, the five standard terms (28, 56, 91, 182, and 364 days), and the next-business-day settlement convention are the only fixed data the site relies on. None of them tracks a market level, so nothing here expires with the news cycle. If a definition ever changes at the source, the affected calculator page and this methodology note are revised together, and the change is acknowledged on the contact page.
Frequently asked questions
How are T-bill yields calculated?
From the discount — face value minus price — divided by price or face value and scaled by days to maturity. BEY divides by price over 365 days; BDY divides by face value over 360 days.
Why do the two yield conventions disagree?
They choose different denominators and different year lengths by tradition. The disagreement is definitional; the discount itself never changes.
Does this site use live market data?
No. Every figure is computed from visitor inputs, which keeps the arithmetic checkable and the pages permanently current in method without quoting market levels.
Data version: formula set 1.0 — constants 360 / 365 and the five standard terms. These do not track any market level.