1. Trade credit and discounts are important strategies used by firms in the daily operations of their business. Calculate the cost of a firms trade credit in each of the following situations (answers should be carried out to two decimal points)
   1. 2/12, Net 30
   2. 3/15, Net 40
   3. 2.5/18, Net 35
   4. 2.25/20, Net 38

Jamie: Follow Formula for a and apply to all:

1. 2%/ (1-2%) times 360/ (30-12)