Brown purchased a $14,000 note secured by a second mortgage for investment purposes. The seller allowed a 15% discount.

Brown purchased a $14,000 note secured by a second mortgage for investment purposes. The seller allowed a 15% discount. The note provided for monthly payments of $1,220 including interest at 9% per annum over a one-year term. Brown received full payment on the above terms. The yield on Brown’s investment, expressed as a percentage, is:

(a) 23%

(b) 31%

(c) 34%

(d) 40%

Thanks in advance and please show your work for the answer.