Company X sells on a 1/20, net 90, basis. Customer Y buys goods with an invoice
ID: 2773477 • Letter: C
Question
Company X sells on a 1/20, net 90, basis. Customer Y buys goods with an invoice of $2,500.
How much can company Y deduct from the bill if it pays on day 20?
How many extra days of credit can company Y receive if it passes up the cash discount?
What is the effective annual rate of interest if Y pays on the due date rather than day 20? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
How much can company Y deduct from the bill if it pays on day 20?
Explanation / Answer
EAR = ((1+ discount percent)^365/credit period –1
Company X sells on a 1/20, net 90, basis. Customer Y buys goods with an invoice of $2,500.Related Questions
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