f Purple Turtle Groups supplier shortens its discount period to five days, this will the cost of the trade credit.

Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Purple Turtle Group buys most of its raw materials from a single supplier. This supplier sells to Purple 3.5/20, net 30 . The cost per period of the trade credit extended to Purple Turtle, rounded to two decimal places, is Purple Turtle's trade credit has a nominal annual cost of , assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) The effective annual rate (EAR) of the supplier's trade credit is