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Credit terms . As manager of Fly-by-Night Airlines, you decide to allow customers 90 days to pay their bills. To encourage early payment, though, you
Credit
terms.
As manager of Fly-by-Night Airlines, you decide to allow customers 90 days to pay their bills. To encourage early payment, though, you allow them to reduce their bills by 1.9% if they pay within the first 27 days. At what implied effective annual interest rate are you loaning money to your customers? What if you extend the discount to 78 days and allow full payment up to
180 days?
At what implied effective annual interest rate are you loaning money to your customers?
(Round to two decimal places.)
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