- Problem 1 Amelia Wilson is the owner/manager of the Kansas Inn. Her accountant has suggested that all cash discounts should be taken. Assume the Kansas Inn can borrow short-term funds at an annual interest rate of 8 percent. Required: 1. Determine the effective rate of interest of the following terms of sale: a. 2/10, n/30 b. 3/10, n/60 c. 1/10, n/50 2. Do you agree with the accountant, given the above terms of sale and the borrowing interest rate for short-term loans as stated above