Terms of Sale A firm offers terms of 4/12, net 30. What effective annual interest rate does the firm earn when a customer does not take the discount? Effective Rate: ____________ % What is the effective annual rate if the discount is changed to 3 percent? Effective Rate: ___________% What is the effective annual rate if the credit period is increased to 45 days? Effective Rate: ____________ % What is the effective annual rate if the discount period is reduced to 5 days? Effective rate: ____________ %