Alternative Ways to Quote Prices Yield and Discount Rate

Alternative Ways to Quote Prices:

Yield and Discount Rate

Yield Rate

P = S ( 1+ y * days/365)^-1

Discount Rate

P = S ( 1- y * days/365)


You pay $80 for a $100 zero that matures in one year.
Compute the yield and the discount.

Yield 

20$ /80$ = %25

Discount

20$/100$ =  %20


Discount = y / (1+y * days/365)

Yield = d / (1- d * days/365)