Discounts

Each of the following situations involves the use of discounts:

1. How much discount may Croft Inc. take in each of the following transactions? What was the annualized interest rate? Round your answers to the nearest whole number. When calculating the annualized rate use 360 days.

		Discount	Annualized Interest Rate
a.	Croft purchases inventory costing $800, 2/10, n/30.	$	%
b.	Croft purchases new office furniture costing $3,100, terms 1/15, n/45.	$	%

2. Calculate the discount rate Kabat Co. received in each of these transactions.

a. Kabat purchased office supplies costing $700 and paid within the discount period with a check for $672. Round your answer to the nearest whole number. %

b. Kabat purchased merchandise for $2,400. It paid within the discount period with a check for $2,340. Round your answer to one decimal place. %