Bank of America borrowed $80,000,000 at 5% interest for 180 days from a Japanese investment house. At the same time, the bank made the following three loans, each for the exact same 180-day period:
A 7% simple interest note for$38,000,000 to a Canadian firm that extracts oil from Canadian tar sands;
An 8.2% simple discount note for $27,500,000 to a European contractor building a factory in South Africa; and
An 8% simple discount note for$14,500,000 to a Louisiana company building minesweepers in New Orleans for the British government.
Find the effective rate of interest to the nearest hundredth of a percent.
a. 7.28%
b. 7.31%
c. 7.42%
d. 7.55%
