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Calamitous Puzzles Inc. purchased $5,000 in inventory with credit terms of 1/15 net 40. a. What is the intrinsic interest rate (APR) that Calamitous Puzzles

Calamitous Puzzles Inc. purchased $5,000 in inventory with credit terms of 1/15 net 40.

a. What is the intrinsic interest rate (APR) that Calamitous Puzzles Inc. is paying if it does not take the early payment discount?

b. What is the effective annual rate (EAR) that Calamitous Puzzles Inc. pays by not taking the early payment discount?

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