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Calculate the nominal annual cost of nonfree trade credit

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Reference no: EM132412422

Calculate the nominal annual cost of nonfree trade credit under each of the following terms. This is done by assume that payment is made either on the discount date or on the due date. I was able to figure out the formula but dont now how to input it.

Nominal Annual Cost of trade = [Discount Percentage / (1-Discount %)] x [360/(Full allowed payment days - Discount days)]

a. 2/15, net 20

b. 1/10, net 45

c. 3/15, net 45

d. 2/ 10, net 50

e. 2/15, net 35

Reference no: EM132412422

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