Question: Brief Exercise 1 3 - 5 ( Algo ) Noninterest - bearing note; effective interest rate [ LO 1 3 - 2 ] Life.com issued

Brief Exercise 13-5(Algo) Noninterest-bearing note; effective interest rate [LO13-2]
Life.com issued $16 million of commercial paper on April 1 on a nine-month note. Interest was discounted at issuance at a 10% discount rate.
Calculate the discount on the commercial paper.
Calculate the effective interest rate on the commercial paper.

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