question archive What is the effective interest rate (rounded) on a 3-month, noninterest-bearing note with a discounted rate of 12% and a maturity value of $200,000? a
What is the effective interest rate (rounded) on a 3-month, noninterest-bearing note with a discounted rate of 12% and a maturity value of $200,000? a
Subject:BusinessPrice:2.87 Bought7
What is the effective interest rate (rounded) on a 3-month, noninterest-bearing note with a discounted rate of 12% and a maturity value of $200,000?
a. 4.1%
b. 11.5%
c. 12.4%
d. 13.6%
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
Quarterly Interest = $200,000*12%*3/12
Quarterly Interest = $6,000
Quarterly Interest Rate = $6,000 / ($200,000 - 6,000)
Quarterly Interest Rate = $3.09%
Annual Interest Rate = 4*3.09% = 12.4%
