Answer to Question #245392 in Economics for Juls

Question

On May 11, 1993, a note due on January 10, 1994 was discounted at 12.12% simple discount. Find the exact simple interest rate of 10.75% for one year and 3 months? What is the exact discount rate?

Answer 1

The exact simple interest rate of 10.75% for one year and 3 months is 10.75×1.25 = 13.44%.

The exact discount rate is 12.12%.