1. On February 14, Coal\'s Retail purchased $14,300 worth of inventory. The term
ID: 2798769 • Letter: 1
Question
1. On February 14, Coal's Retail purchased $14,300 worth of inventory. The terms of sale were 2/10, net 45. The dollar amount of implicit interest charged if they do not pay the discounted price is ________ and the Annual Percentage Rate (APR) is _____ percent.
Select one:
a. $572; 74.50
b. $286; 21.28
c. $572; 2.041
d. $14,014; 21.28
e. $286; 37.25
2. Which one of the following would be the most common evidence of a debt when a sale is made on credit?
Select one:
a. Invoice
b. Promissory note
c. Commercial draft
d. Banker's acceptance
e. Sight draft
Explanation / Answer
1)
Dollar amount of implicit interest:
= Price*Discount%
= $14,300*2%
= $286
Annual percentage rate:
Hence, correct option is b. $286; 21.28
21.28% (0.02/(1-0.02)*((365/(45-10))))Related Questions
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