Brief Exercise $13-5($Algo$)$ Noninterest$-$bearing note; effective interest rate $[$LO$13-2]$

Life.com issued $$16$ million of commercial paper on April $1$ on a nine$-$month note. Interest was discounted at issuance at a $10\%$ discount rate.

Calculate the discount on the commercial paper.

Calculate the effective interest rate on the commercial paper.