The discount rate over 18 months is 1.5*14%=21%. 21% of $8500=$1785, discounted from $8500 is $6715. If this amount is to repay $8500 in 18 months, then 6715*1.5r is the interest, where r is the simple interest rate, and if this is added to $6715 it must be equal to $8500; so 6715+6715*1.5r=8500. 6715*1.5r=$1785, so r=1785/(6715*1.5)=0.1772=17.72%. But this is the interest rate over 18 months so must be reduced by 1.5 to give the annual rate: 17.72/1.5=11.81%.