The effective annual rate of non

The effective annual rate of non–free trade credit

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Reference no: EM131551374

1. Lima Corporation makes purchases on credit, and its suppliers grant it credit terms of 2/15, net 30. Assuming there are 360 days in a year, the effective annual rate of non–free trade credit if the firm did not take discounts but did pay on the due date is?

2. Suppose a firm purchases goods on credit terms of 3/10, net 15, and the firm always takes discounts. The cost of using the funds for six days is?

3. MoJo Corporation purchases goods on credit terms of 4.5/15, net 40. The cost of non–free trade credit for the 25-day period if the firm did not take discounts but did pay on the due date is?

4. Venus Inc. recently borrowed $750,000 from its bank at a simple interest rate of 10 percent. The loan is for six months and, according to the loan agreement, the interest should be added to the amount borrowed and the total amount to be repaid in monthly installments. The loan's effective annual rate (EAR) is?

5. Pelican Corporation receives a ten-month $200,000 discount interest loan with a 14 percent quoted (simple) interest rate. What is the annual percentage interest rate for the loan? (Round your answer to two decimal places.)?

Reference no: EM131551374

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