1200:12:14Life.com issued $20 million of commercial paper on April 1 on a nine-month note. Interest was discounted at issuance at a 11% discountrate.1. Calculate the discount on the commercial paper.2. Calculate the effective interest rate on the commercial paper.Complete this question by entering your answers in the tabs below.Discount Effective RateCalculate the effective interest rate on the commercial paper.Note: Do not round intermediate calculation. Enter your answers in whole dollars. Round "Effective Interest Rate" to 1 decimal place. (i.e.,0.123 should be entered as 12.3).DiscountProceeds=$ 1,650,000 =9-month rate0%%

Commercial paper issued amount = $20,000,000Discount rate = 11%Time period = 9 months

Answered: 00:12:14 Life.com issued $20 million of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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