Question
( Annual percentage yield ) Compute the cost of the following trade credit terms using the compoundingformula, or effective annual rate. Note : Assume a30-day
(Annual percentage yield) Compute the cost of the following trade credit terms using the compoundingformula, or effective annual rate. Note: Assume a30-day month and360-day year.
a. 4
4/15
15, net 30
30
b. 2
2/10
10, net 45
45
c. 2
2/15
15, net 60
60
d. 3
3/10
10, net 60
60
a. When payment is made on the net duedate, the APR of the credit terms of 4
4/15
15, net 30
30 is
nothing
%. (Round to two decimalplaces.)
The EAR of the credit terms of 4
4/15
15, net 30
30 is
nothing
%. (Round to two decimalplaces.)
b. When payment is made on the net duedate, the APR of the credit terms of 2
2/10
10, net 45
45 is
nothing
%. (Round to two decimalplaces.)
The EAR of the credit terms of 2
2/10
10, net 45
45 is
nothing
%. (Round to two decimalplaces.)
c. When payment is made on the net duedate, the APR of the credit terms of 2
2/15
15, net 60
60 is
nothing
%. (Round to two decimalplaces.)
The EAR of the credit terms of 2
2/15
15, net 60
60 is
nothing
%. (Round to two decimalplaces.)
d. When payment is made on the net duedate, the APR of the credit terms of 3
3/10
10, net 60
60 is
nothing
%. (Round to two decimalplaces.)
The EAR of the credit terms of 3
3/10
10, net 60
60 is
nothing
%.
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