An income tax preparation service discounts income tax refunds at the statutory maximum amount of 15% on the first $300. For example, a taxpayer eligible for a $200 tax refund can sell the refund to the discounter for immediate payment of $170. What is the discounter’s effective annualized rate of return if the time taken by the Canada Revenue Agency (CRA) to process the taxpayer’s return and refund the tax is
a. 25 days?
b. 50 days?