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The effective annual interest rate of this trade cost

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Raise $600,000 for 1 year to supply working capital to a new store. I buy from my suppliers on terms of 2/10, net 90, and currently pay on the 10th day and take discounts. However, I can forgo discounts, pay on the 90th day, and get the needed $600,000 in the form of costly trade credit. What is the effective annual interest rate of this trade cost? Assume 365 days in year and cannot round intermediate calculations. Final answer rounded to two decimal places.

Reference no: EM13293172

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