What effective annual interest rate

Assignment Help Business Economics

Reference no: EM131807729

The treasurer of a firm noted that many invoices were received with the following terms of payment: "2%- 10 days, net 30 days." Thus, if he were to pay the bill within 10 days of its date, he could deduct 2%. On the other hand, if he did not promptly pay the bill, the full amount would be due 30 days from the date of the invoice. Assuming a 20-day compounding period, the 2% deduction for prompt paymentis equivalent to what effective annual interest rate?

Reference no: EM131807729

Questions Cloud

Annual interest rate and the effective annual interest rate : Based on a 6-month interest period, compute the nominal annual interest rate and the effective annual interest rate.

Identify key competencies of lazada : Identify key competencies of Lazada and justify how the company capitalises its strengths to gain its competitive advantage in Singapore.

What effective annual interest rate did he receive : Mr. Sansome receive on his investment in stock? What effective annual interest rate did he receive?

Describe accounting treatment that appears to be appropriate : Evaluate whether finding out about your client's bankruptcy indicates that you have a change in accounting estimate or an error in previously issued financial

What effective annual interest rate : Assuming a 20-day compounding period, the 2% deduction for prompt paymentis equivalent to what effective annual interest rate?

Discuss how do we tell whether someone is an employee : How do we tell whether someone is an employee or whether he or she is self-employed for purposes of the Code

How much is this investment worth now : The interest charges were compounded quarterly. How much is this investment worth now?

Describe the importance of the enactment of the hipaa : Describe the importance of the enactment of the HIPAA, and appraise the overall impact of HIPAA on patients' medical records.

Sending alumni of universities an invitation : First Bank is sending alumni of universities an invitation to obtain a credit card, with the name of their university written on it, for a nominal

User Account

All Pages