Aaron Company Borrows $4,000 by Giving the Bank Its Own

Multiple Choice

Aaron Company borrows $4,000 by giving the bank its own 8%, 90-day note. The bank discounts the interest. The effective interest rate is: (Use a 360-day year. Do not round any intermediate calculations. Round your final answer two decimal places, X.XX%.)

A) 7.84%.
B) 8.16%.
C) 8.00%.
D) 8.33%.