What is the implicit effective annual interest rate on a company transaction to raise $100 000 finance by drawing a commercial bill with face value of $105 000 payable in 180 days?
A)9.746%
B)4.76%
C)9.65%
D)None of the given options.

Question

Quizplus · Accepted Answer

The implicit effective annual interest rate can be calculated using the formula for the effective annual rate (EAR) considering the interest (which is the difference between the face value and the amount financed), the principal amount, and the time period. The options provided do not match the calculation based on the given information, hence the correct answer is that none of the given options accurately represent the implicit effective annual interest rate.

What Is the Implicit Effective Annual Interest Rate on a Company