6. Cost of trade credit Aa Aa Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Purple Turtle Group buys most of its raw materials from a single supplier. This supplier sells to Purple Turtle on terms of 2/20, net 45. The cost per period of the trade credit extended to Purple Turtle, rounded to two decimal places, is Purple Turtle's trade credit has a nominal annual cost of intermediate calculations to four decimal places, and your final answer to two decimal places.) places, and your final answ rming a 365-day year. ( The effective annual rate (EAR) of the supplier's trade credit is If Purple Turtle Group's supplier shortens its discount period to five days, this will credit. the cost of the trade