On October 31,2016,Simeon Builders Borrowed $16 Million Cash and Issued

Multiple Choice

On October 31,2016,Simeon Builders borrowed $16 million cash and issued a 7-month,noninterest-bearing note.The loan was made by Star Finance Co.The stated discount rate is 8%.Sky's effective interest rate on this loan is:

A) More than the stated discount rate of 8%.
B) Less than the stated discount rate of 8%.
C) Equal to the stated discount rate of 8%.
D) Unrelated to the stated discount rate of 8%.