Purchase Discounts. Consider the Annualized Interest formula on page 3-6. Uniden, Inc. has a $2,000 invoice that is due in 60 days from a supplier. If Uniden pays the invoice in 10 days, it can take advantage of a 2 percent cash discount offered by the supplier. Alternatively, Uniden can invest the money in a money market account paying 9 percent annual interest.

a. Should Uniden, Inc. pay the invoice within 10 days how much will they pay?

b. Should Uniden, Inc. pay the invoice within 10 days how much will they save?

c. Determine if Uniden should take pay the invoice and take advantage of the discount , or if they should not take the discount and instead put the money in savings in the money market account (hintcomparing raw dollar amounts is not a proper decision approach).