Joanne Germano works in an accounts payable department of a major retailer. She has attempted to convince her boss to take the discount on the 2/15 net 60 credit terms most suppliers offer, but her boss argues that giving up the 2% discount is less costly than a short-term loan at 7%.

Prove to whoever is wrong that the other is correct.

(Note: Assume a 365-day year.)

The cost of giving up the cash discount is ___%