McGrath Corporation recently issued 180-day commercial paper with a face value of $1,500,000 and a simple interest rate of 13 percent. The company paid a transaction fee equal to 0.3 percent of the amount issued, which was taken out of the issue amount before the company received any funds. Assuming there are 360 days in a year, what are the commercial paper's annual percentage rate (APR) and effective annual rate (rEAR), respectively?
A. APR = 7.30%; rEAR = 15.12%
B. APR = 9.73%; rEAR = 9.84%
C. APR = 13.97%; rEAR = 14.23%
D. APR = 14.59%; rEAR = 15.12%
E. APR = 15.34%; rEAR = 15.34%
Answer: D
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