Final answer:
The effective yield on a discount loan can be calculated using the formula involving interest, principal, rate, and time period. Months should be converted to years for the time period, and the rate should be expressed as a decimal. The result should be rounded to two decimal places.
Step-by-step explanation:
To find the effective yield on a discount loan with a given discount rate r and time, we use the formula for the effective yield which considers the actual amount received from the loan and the time the money is used. Let's assume the principal amount of the loan is P.
First, calculate the interest (I) using the formula: I = P × r × t, where t is the time period in years. Since we are given 8 months, this should be converted to years by dividing by 12. The actual amount received from the discount loan is P - I.
The effective yield (EY) is then calculated as EY = (I / (P - I)) / t.
Without the actual principal amount P, we cannot provide a numerical answer, but the method above outlines how to calculate the effective yield once P is known. Remember to convert the time into a yearly fraction and to express the rate as a decimal for calculation purposes.
Make sure to round the final effective yield to two decimal places as requested.