On Jan $1$ of the current year, your company purchased a building and signed a note with a face value of $$250$ million, carrying a $6\%$ annual interest rate. The note is due after $8$ years. Interest on the note is payable annually at Dec $31.$

Your company's credit standing is such that it could never borrow money at less than $11\%$ annual rate of interest. So$,11\%$ is the effective rate of the note.