What is the effective interest rate (rounded) on a 3-month, noninterest-bearing note with a stated rate of 12% and a maturity value of $200,000?
A) 12.4%.
B) 13.6%.
C) 11.5%.
D) 3.1%.

Name: What is the effective interest rate (rounded) on a 3-month, noninterest-bearing note with a stated rate of 12% and a maturity value of $200,000? A) 12.4%. B) 13.6%. C) 11.5%. D) 3.1%.
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Question

Quizplus · Accepted Answer

$200,000 × 12% × 3/12 = $6,000
$6,000/($200,000 - $6,000) = 3.09%
3.09% × 12/3 = 12.4% (rounded)

What Is the Effective Interest Rate (Rounded) on a 3-Month