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9966 [12]
3 years ago
11

What is the effective rate of a $25,000 interest-bearing simple discount 10%, 90-day note?

Business
1 answer:
salantis [7]3 years ago
5 0
The effective interest rate on a discounted note is
.. 1/(1-r) = 1/0.9 ≈ 11.11%

_____
The amount and time have nothing to do with it for simple interest.
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