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Company X sells on a 2/15, net 90, basis. Customer Y buys goods with an invoice of $4,000. a. How much can company Y deduct

Company X sells on a 2/15, net 90, basis. Customer Y buys goods with an invoice of $4,000.

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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