Required

a$.$ A firm currently offers terms of sale of $3/20,$ net $40.$ Calculate the effective annual rate.

a$-1.$ Calculate the effective annual rate if the terms are changed to $4/20,$ net $40.$

a$-2.$ What effect does an increase in the discount rate have on the implicit interest rate charged to customers that pass up the discount?

b$-1.$ Calculate the effective annual rate if the terms are changed to $3/30,$ net $40.$

b$-2.$ What effect does a decrease in the extra days of credit have on the implicit interest rate charged to customers that pass up the discount?

c$-1.$ Calculate the effective annual rate if the terms are changed to $3/20,$ net $30.$

c$-2.$ Is there any difference between the implicit interest rate for terms of $3/30,$ net $40$ and $3/20,$ net $30?$