Question
(PLEASE ANSWER ALL QUESTIONS SHOWING STEPS AND WORK) 1.If trade credit terms are 2/15, net 60, what is the effective annual interest rate of not
(PLEASE ANSWER ALL QUESTIONS SHOWING STEPS AND WORK)
1.If trade credit terms are 2/15, net 60, what is the effective annual interest rate of not taking the discount and paying on day 55?
2. If the ABC Co. needs a $200,000 loan for six months, what will the APR be if there is 40% compensating balance required, the interest rate is 10%, interest is not discounted and the company must borrow the funds to be used for the 40% compensating balance?
3.Factoring A/R (discounted). WHat is the APR if $100,000 face amount if A/R are factored carrying 60-day terms, 2% factor fee, 6% reserve, and interest @1%/MO on advances?
(PLEASE SHOW ALL WORK AND STEPS FOR EACH PROBLEM)
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