Annual Interest Rate: The annual interest rate refers to the rate of interest at which the annual simple interest is calculated. It is the rate of interest that is paid on an investment or loan or bonds after to take into consideration of compounding over a period of time. Discount Factor: Discount factor is a financial term which is used to calculate the present value of money. The discount factor is a value which is multiplied with any amount and results its present value. To identify: The annual interest rate of investment.

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Chapter B, Problem 7E

To determine

Annual Interest Rate:

The annual interest rate refers to the rate of interest at which the annual simple interest is calculated. It is the rate of interest that is paid on an investment or loan or bonds after to take into consideration of compounding over a period of time.

Discount Factor:

Discount factor is a financial term which is used to calculate the present value of money. The discount factor is a value which is multiplied with any amount and results its present value.

To identify: The annual interest rate of investment.

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