What simple interest rate was used to discount 270-day, $750,000 commercial paper when it was issued for $710,000?

A) 7.21%
B) 7.62%
C) 5.33%
D) 6.63%
E) 6.94%

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories, and meeting other short-term liabilities.

Simple Interest

Interest computed solely on the initial sum or on the outstanding part of that initial sum.

Discount

A reduction applied to the regular price of goods or services, usually to incentivize purchase.