Calculating discount for bank discount yield

[stuartbale1]

When we are converting and we have to find discount if bank discount yield is given then the answer would be in % or $value, and how much we can deduct from face value to arrive at price. Please clarify this concept

 

[S2000magician]

I wrote an article on yield measures that may be helpful here: http://financialexamhelp123.com/yield-measures-quant/
Suppose that you have a 90-day T-bill with a BDY of 2%. This means that the annualized discount is 2% × $1,000 = $20. As this is a 90-day T-bill, the period discount would be 90/360 × $20 = $5. The price of the T-bill is therefore $1,000 − $5 = $995.