Repo Rate (CFAI reading 30) following, overnight, somebody

BelalM

Could somebody explain me this on page -110 of CFAI, reading 30?
A manager can borrow $10 M overnight at an interest rate of 3% by selling treasury securities values at $10M and simultaneously agreeing to repurchase the same notes the following day for 10,000,933. Interest on the loan is $833
How is $833 calculated? What is the role of interest rate specification?
Highly appreciate your help?

yuoska

Thanks Char-Lee

Darien

it’s just the daily accrued interest of the 3% annual rate. Don’t ask me why they use 360 vs 365 either… essentially its just the interest cost for borrowing $10M for a day (using the treasuries as collateral)
(10,000,000 * 3%)/360 = $833