the year. The interest charge for the month is calculaded Monthly interest Rate per day Amount of loan Days in month Another type of loan is an add-on Interest loan. Here interest is calculated and added to the funds received to determine the face amount of an installment loan. The approximate annual rate of an add-on loan is calculated as follows: pad Approacimate annual rate- Costly trade credit can be very expensive, so often a firm will choose to borrow from a bank and pay trade discounts rather than paying after the discount period. Firms will choose the lowest-cost source Quantitative Problem Adams Manufacturing Inc. buys $1.2 million of materials (net of discounts) on terms of 2/10, net 60; and it currently pays after 10 days and takes the discounts. Adams plans to expand, which will require additional financing, IF Adams decides to forge discounts, how much additional credit could it obtain? Assume 365 days in year for your calculations. Do not round Intermediate calculations. Round your answer to the nearest cent. 5 What would be the nominal and effective cost of such a credit assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places Nominal cost Effective cost If the company could receive the funds from a bank at a rate of 7.25, interest paid monthly based on a 365-day year, what would be the effective cost of the bank loan? Do round intermediate actions. Round your answer to the decimal places Should Adams se bare det or additional trade chor