What simple discount rate d is equivalent to a simple interest rate of 8% over a 200-day period?
A)9.00%
B)7.66%
C)8.58%
D)7.41%

Question

Quizplus · Accepted Answer

The formula for converting a simple interest rate to a discount rate is:

Discount rate (d) = 100 x Simple interest rate / (100 + (Simple interest rate x Time))

Plugging in the given values:

d = 100 x 8% / (100 + (8% x 200/365))
d = 7.66%

Therefore, the answer is choice B.

What Simple Discount Rate D Is Equivalent to a Simple