Discounts Each of the following situations involves the use of discounts.

1. How much discount may Seals Inc. take in each of the following transactions? What was the annualized interest rate?

a. Seals purchases inventory costing $450, 2/10, n/40.

b. Seals purchases new office furniture costing $1,500, terms 1/10, n/30.

2. Calculate the discount rate that Croft Co. received in each of these transactions.

a. Croft purchased office supplies costing $200 and paid within the discount period with a check for $196.

b. Croft purchased merchandise for $2,800. It paid within the discount period with a check for

$2,674.