Company X sells on a 2/15, net 60, basis. Customer Y buys goods with an invoice of
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Question:
Company X sells on a 2/15, net 60, basis. Customer Y buys goods with an invoice of $4,500.
| a. | How much can company Y deduct from the bill if it pays on day 15? |
| Discount | $ |
| b. | How many extra days of credit can company Y receive if it passes up the cash discount? |
| Number of days | days |
| c. | What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) |
| Effective annual rate | % |
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