What is effective annual rate of interest

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Company X sells on a 1/10, net 60, basis. Company Y buys goods with an invoice of $5,500.

a. How much can company Y deduct from the bill if it pays on day 10?

b. How many extra days of credit can company Y receive if it passes up the cash discount?

c. What is the effective annual rate of interest if Y pays on the due date rather than day 10? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Effective annual rate:

Reference no: EM131865074

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