An investor purchased T-notes that mature on July 1, 1999, on February 20th. How many days of accrued interest did the investor owe?

To determine the number of days of accrued interest owed by the investor for the T-notes purchased on February 20, 1999, that mature on July 1, 1999, it is essential to understand how accrued interest is calculated for Treasury securities.

T-notes (Treasury notes) pay interest every six months. The interest payment dates for a note maturing on July 1 would typically be January 1 and July 1. When an investor purchases a T-note between coupon payment dates, they owe the seller the accrued interest from the last coupon payment date up to the purchase date.

In this case, since the last coupon date before the purchase is January 1, 1999, and the purchase date is February 20, 1999, we need to calculate the number of days between these two dates:

1. From January 1 to January 31, there are 30 days (since January has 31 days).

2. From February 1 to February 20, there are 19 days.

When combining these two periods, we find that there are a total of 30 days from January plus 19 days from February, leading to a total of 49 days of accrued interest that the investor