ch20 A firm offers terms of 2.6/7, net 30. Solve for C and D What effective annu

Question

ch20

A firm offers terms of 2.6/7, net 30. Solve for C and D

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 3.6/7, net 30, 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 2.6/7, net 45, 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 2.6/12, net 30, 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 2.6/7, net 30. Solve for C and D

Explanation / Answer

What effective annual interest rate does the firm earn if the terms are changed to 2.6/7, net 45, 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))

Effective annual interest rate = (1+ i) ^(365/n) -1

i =2.6/(100-2.6)

n = 45-7 = 38 days

Effective annual interest rate = (1+2.6/(100-2.6))^(365/(45-7)) - 1

Effective annual interest rate = 28.79%

What effective annual interest rate does the firm earn if the terms are changed to 2.6/12, net 30, 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))

Effective annual interest rate = (1+ i) ^(365/n) -1

i =2.6/(100-2.6)

n = 30-12 = 18days

Effective annual interest rate = (1+2.6/(100-2.6))^(365/18) - 1

Effective annual interest rate = 70.61%

What effective annual interest rate does the firm earn if the terms are changed to 2.6/7, net 45, 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))

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

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