Compute the nominal cost of trade credit

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Problem - On February 5, 2020, BALUBARAN Enterprise has purchased goods on account amounting to P500,000 with credit terms 3/15, n/60 from its major trade supplier. BALUBARAN operates 360 days a year.

a. Compute the Nominal cost of trade credit.

b. Compute the Effective cost of trade credit.

c. Assuming BALUBARAN did not pay the account within the discount period, how much is the penalty in using the money for the next 45 days?

Reference no: EM132958858

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