What Is the Effective Interest Rate of a Simple Discount

question 25

Multiple Choice

What is the effective interest rate of a simple discount note for $2,700 at a bank discount rate of 12.25%, for 36 months? (Round to the nearest tenth percent)

• A) 19.0%
• B) 22.0%
• C) 19.4%
• D) 14.1%

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Definitions:

Control Behaviour

Refers to the management or regulation of one's actions or reactions in various situations.

Humanist

A person who advocates for the values of human welfare, dignity, and rationalism, often emphasizing the importance of human values and concerns.

Environmental Circumstances

The physical, social, and cultural conditions that surround and influence an individual or community.

Relevance

The quality of being closely connected or appropriate to what is being done or considered.