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

User Jlam
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1 Answer

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The effective interest rate on a discounted note is
.. 1/(1-r) = 1/0.9 ≈ 11.11%

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The amount and time have nothing to do with it for simple interest.
User Josh Knauer
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