If a supplier quotes you terms of 1.5% discount for payment of an account within 21 days or net 60 (1.5/21, N60) what is the effective interest rate if you do not pay until 60 days after receipt of the account?

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: Trade discount: it is a reduction granted by a supplier forms the list price of goods or services on…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: Credit terms of 3/15, net of 30 days, Number of days to repay the loan is 50 days

Q: If a firm is given a trade credit terms of 2/15, net 30,  then the cost to the firm failing to take…

A: Trade credit terms of 2/15, net 30 means the firm gets a 2% discount if it pays within 15 days.…

Q: If a firm is given a trade credit terms of 2/15, net 30, then the cost to the firm failing to take…

A: 1. 2/15, net 30 means if payment is made within 15 days , it will get 2% discount.  Otherwise the…

Q: On a 365-day basis, using a trade credit terms of 2/10, net 30, and payment is made on the twentieth…

A: In case of trade credit, 2% discount is being given if payment is made till 10th day.

Q: (Assume If credit terms of "2/10, net 40" are offered, the approximate cost of not taking the…

A: 2/10 net 30 means 2% discount will be there if payment is made with in 10 days and no discount after…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: The credit terms of 3/15, net of 30 days means if the firm will pay the credit amount within the 15…

Q: rate per period? The number of compounding period is ___ How many days are there per

A: Number of days per period are as follows:

Q: how long will it take for teh account to be paid off?

A: Formula for loan amortization A= [i*P*(1+i)^n]/[(1+i)^n-1] Formula for calculating number of…

Q: c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use…

A: Given, Invoice amount=$ 1,500 1/15, net 60, basis which means if company y pays within 15 days then…

Q: American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on…

A: Information given : Annual Percentage Rate (APR) = 15.75% = 0.1575 Compounding frequency = Monthly…

Q: a. A Visa credit card issued through Frost Bank carries an interest rate of 1% per month on the…

A: Effective Annual Rate is a modified rate of return where it considers the compounding effect.…

Q: A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an…

A: Formula: Interest amount = Loan amount x Interest rate x Time period

Q: A supplier is offering your firm a cash discount of 2 percent if purchases are paid for within ten…

A: We will have to compute the effective rate of cash discount being offered by the supplier.

Q: terms.   As manager of​ Fly-by-Night Airlines, you decide to allow customers 90 days to pay their…

A: Credit terms: Credit is given to customer on sales when it is not on instant cash payment. Then…

Q: A particular credit card calculates interest using the unpaid balance method. The monthly interest…

A: Interest is calculated on unpaid balance method. Interest rate = 1.57% on the unpaid balance on the…

Q: A payday loan company charges 5% interest for a 2 week period. What would be the annual interest…

A: Interest Rate = 5%Period of Interest Charge = 2 WeeksNumber of Weeks in a Year = 52 Calculation of…

Q: A store will give you a 4.00% discount on the cost of your purchase if you pay cash today.…

A: Cash Discount is the discount provided by the sellers to encourage buyers to make payment of their…

Q: Big Dom's Pawn Shop charges an interest rate of 25.5 percent per month on loans to its customers.…

A: Solution (A) APR is the interest rate per period times the number of periods in a year APR = 12…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: solution given credit terms       =3/15 net 30 days firm pays in 50 days the extra days taken      =…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it…

A: Cost of not taking Trade Discount  = Discount % / (100 - Discount%) × 365/(Total Pay period -…

Q: PLEASE SHOW ALL WORK For terms of 8/10, n/60 determine the annual rate you, in effect, pay the…

A: Credit terms = 8/10 , n/60 means if payment is made within 10 days then supplier will offer 8%…

Q: Insert an answer for each of the following  p= $ 3,200, r=.023, t= 3months. interest ?…

A: solution answer to 1 interest                =p * r * 3/12                                 =$3200 *…

Q: An item is sold for an initial installment of $600 and 18 payments of $500 at the end of each month,…

A: Amortization schedule:  An amortization schedule is a detailed table of periodic loan payments that…

Q: On a 365-day basis, what is the effective annual rate of using trade credit if terms are 2/10, net…

A: If the payment is done in 10th day, the discount is given for 2 else full payment is required if…

Q: Credit terms. As manager of Fly-by-Night Airlines, you decide to allow customers 90 days to pay…

A: Because you have posted multiple questions , we will answer only the first question. for the…

Q: payday loan company charges a $40 fee for a $450 payday loan that will be repaid in 11 days using…

A: You need to understand 4 steps to calculate annual interest rate for pay day loan…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: SOLUTION-   WORKING- NUMBER OF DAYS ARE THERE PER PERIOD IS 50-15 = 35 DAYS.

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: The cost of trade credit: The cost of trade credit is actually an opportunity cost that occurs when…

Q: what is the annual interest rate cost (Use 360-day year)?

A: If the firm foregoes the cash discount offered then they would be paying higher for the goods. This…

Q: From the payment terms, 2/15, n/30, the discount period is ___________. a. 17 days b. 15 days c. 30…

A: Payment terms defines that in how many days payment should be made. It will also define that how…

Q: A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an…

A: The process of creating financial statements to indicate an entity's financial condition is known as…

Q: A store will give you a 5.00% discount on the cost of your purchase if you pay cash today.…

A: Calculation of the implicit borrowing rate being paid by customers: Let's assume that the cost of…

Q: ne of your customers is delinquent on his accounts payable balance. You've mutually agreed to a…

A: Current balances to be paid off  equal payments that carry the interest and principal that are to be…

Q: A firm charges its credit customers 1.67% interest per month. What is the effective interest rate?

A: Effective interest rate is the real return on savings account. It is given as: R = 1+inn-1

Q: Calla Lily Corp. purchases on terms of 2/8, net 45 days, does not accept discounts, and pays after…

A: Time = 45 days Terms = 2/8 Pay after A = 58 days Year y = 365 days

Q: Calculate the nominal annual cost of no free trade credit under each of the following terms. Assume…

A: Note: As per our guidelines, we can only solve up to 3 subparts. Please post other parts separately.

Q: Given credit terms of 2/25, n/30 on a sale of $1,500, in how many days must the invoice be paid to…

A: In the given terms, n/30 indicates that the payment should be made within 30 days. Hence, option A)…

Q: the effective borrowing cost of skipping the discount on day 10 is closest to:

A: Trade credit is an agreement in which a customer can purchase goods from the seller without paying…

Q: Which one of the following statements is correct if you purchase an item with credit terms of 3/15,…

A: The credit terms are the terms of sale for customers who have been extended credit by the firm. Here…

Q: A finance company paid a merchant $3,975 for a conditional sale contract after discounting it to…

A: The value of payment or receipt to be executed in future at present time is called the Present…

Q: Bulldogs Inc. is given terms of 2/10, net 45 by its suppliers. If Bulldogs Inc. forgoes the cash…

A: Cash discount if paid within 10 days= 2%

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.