Xenon Xrays (XX) recently issued 180-day commercial paper with a face value of $100,000 and a simple

Question:

Xenon Xrays (XX) recently issued 180-day commercial paper with a face value of $100,000 and a simple interest rate of 7 percent. XX paid a transaction fee equal to 0.3 percent of the issue, which was taken out of the issue amount before the company received any funds. Compute the commercial paper’s APR and r_EAR.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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