How do I calculate the commercial paper?
It is important to understand how to calculate the Commercial Paper rate. The rate is calculated by deducting the face value of the paper from its discount rate. The resulting value is then divided by the face value of the paper to get the Commercial Paper rate. To calculate the Commercial Paper rate, use the following formula:
(Discount Rate - Face Value) / Face Value . It is important to note that Commercial Paper is unsecured and short-term debt issued by corporations, so caution should be taken when investing in this type of paper. For further calculations, Sourcetable can be used for more accuracy.