A survey of large UK companies (Pike et al., 1998) found that the normal credit period granted was 30 days, but the average credit period taken by customers was 46 days. Only 20 per cent of firms offered prompt payment cash discounts, with the most common terms being 2½ per cent/net 30 days. For a company offering those terms, what would be the effective interest rate for granting cash discounts assuming that firms would otherwise pay within 46 days?