A firm offers terms of 2.0/7, net 60. What effective annual interest rate does t

Question

A firm offers terms of 2.0/7, net 60.

What effective annual interest rate does the firm earn when a customer does not take the discount?(Use 365 days a year.Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What effective annual interest rate does the firm earn if the terms are changed to 3/7, net 60, and the customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What effective annual interest rate does the firm earn if the terms are changed to 2/7, net 75, and the customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What effective annual interest rate does the firm earn if the terms are changed to 2/12, net 60, and the customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

A firm offers terms of 2.0/7, net 60.

Explanation / Answer

a>Effective Interest Rate=(1.02^(365/60)-1)*100 12.80 b>Effective Interest Rate=(1.03^(365/60)-1)*100 19.70 c>Effective Interest Rate=(1.02^(365/75)-1)*100 10.12 d>Effective Interest Rate=(1.02^(365/60)-1)*100 12.80

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.