On October 31,2016,Simeon Builders borrowed $16 million cash and issued a 7-month,noninterest-bearing note.The loan was made by Star Finance Co.The stated discount rate is 8%.Sky's effective interest rate on this loan is:
A) More than the stated discount rate of 8%.
B) Less than the stated discount rate of 8%.
C) Equal to the stated discount rate of 8%.
D) Unrelated to the stated discount rate of 8%.
Correct Answer:
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