MrA Lends $20,000 to Mr

Multiple Choice

Mr.A lends $20,000 to Mr.B on May 6,2010.A promissory note is written by Mr.B at a simple interest rate of 9%.The due date of the note is October 6,2010.The maturity value of the note is $20,769.32.Mr.C sells the note to a bank on August 6,2010 for $20,419.16.What rate of return does the bank earn on their investment?

A) 9.78%
B) 10.26%
C) 11.71%
D) 11.95%